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VERSION 4.0

SEPTEMBER 2007

Contents

[I. Overview of the Purchase Card Program
1](#overview-of-the-purchase-card-program)

[A. Purpose of This Guide 1](#purpose-of-this-guide)

[B. Scope and Applicability 1](#scope-and-applicability)

[C. Organization of This Guide 1](#organization-of-this-guide)

[D. Effect 2](#effect)

[E. Background 3](#background)

[F. HHS Purchase Card Program Organization
3](#hhs-purchase-card-program-organization)

[G. Key Responsibilities 4](#key-responsibilities)

[H. Management of the HHS Purchase Card Program
7](#management-of-the-hhs-purchase-card-program)

[I. Maintenance of This Guide 8](#maintenance-of-this-guide)

[II. Establishing and Maintaining Purchase Card Accounts
9](#establishing-and-maintaining-purchase-card-accounts)

[A. Selection and Appointment of A/OPCs, Approving Officials, and
Cardholders
9](#selection-and-appointment-of-aopcs-approving-officials-and-cardholders)

[1. General 9](#general)

[2. Emergency Purchase Cards 10](#emergency-purchase-cards)

[3. Nominating Prospective AOs and Cardholders
11](#nominating-prospective-aos-and-cardholders)

[B. Training Requirements 12](#training-requirements)

[1. Purchase Card Training 12](#purchase-card-training)

[2. Training Audit Procedures 13](#training-audit-procedures)

[3. Remedial Training 14](#remedial-training)

[C. Account Setup 14](#account-setup)

[1. Purchase Cards 14](#purchase-cards)

[2. AO Accounts 15](#ao-accounts)

[D. Account Maintenance 15](#account-maintenance)

[1. Changes in Cardholder Status 15](#changes-in-cardholder-status)

[2. Changes in AO Status 15](#changes-in-ao-status)

[3. Administrative Changes to Cardholder and AO Accounts
16](#administrative-changes-to-cardholder-and-ao-accounts)

[4. Changes to Account Dollar Limits
16](#changes-to-account-dollar-limits)

[5. Other Changes to Accounts 16](#other-changes-to-accounts)

[6. Inactive Cards 17](#inactive-cards)

[E. Account Suspension and Termination
17](#account-suspension-and-termination)

[1. Account Suspension 17](#account-suspension)

[2. Account Termination 18](#account-termination)

[3. Reinstatement 19](#reinstatement)

[F. Card and Account Security 19](#card-and-account-security)

[III. Using the Purchase Card 21](#using-the-purchase-card)

[A. Cardholder Process for Micropurchases
21](#cardholder-process-for-micropurchases)

[1. Determine Eligibility for Card Purchase
21](#determine-eligibility-for-card-purchase)

[2. Initiate Purchase Process 21](#initiate-purchase-process)

[3. Review Requirements and Plan Purchase
23](#review-requirements-and-plan-purchase)

[4. Determine if Funding is Adequate
23](#determine-if-funding-is-adequate)

[5. Determine if Purchase is Within Dollar Limits
24](#determine-if-purchase-is-within-dollar-limits)

[6. Check Required Sources for Product/Service
26](#check-required-sources-for-productservice)

[7. Conduct Market Research 29](#conduct-market-research)

[8. Determine if Merchant Accepts Card
30](#determine-if-merchant-accepts-card)

[9. Determine if Tax is Added by Merchant
31](#determine-if-tax-is-added-by-merchant)

[10. Determine if Merchant Added Surcharge for Using Card
32](#determine-if-merchant-added-surcharge-for-using-card)

[11. Ensure Merchant Bills Only Upon Shipment
32](#ensure-merchant-bills-only-upon-shipment)

[12. Price Reasonableness 33](#price-reasonableness)

[13. Purchase from Merchant 33](#purchase-from-merchant)

[14. Denied Transactions 34](#denied-transactions)

[15. Arrange for Delivery 35](#arrange-for-delivery)

[16. Register Purchase Information in Log
35](#register-purchase-information-in-log)

[17. Maintain Monthly File for Receipts and Other Documentation
36](#maintain-monthly-file-for-receipts-and-other-documentation)

[18. Receive Products/Services 36](#receive-productsservices)

[19. Disputed Transactions 36](#disputed-transactions)

[20. Receive Monthly Bank Statement 38](#receive-monthly-bank-statement)

[21. Reconcile Monthly Purchases with Bank Statement
38](#reconcile-monthly-purchases-with-bank-statement)

[22. Review for Unauthorized Charges
38](#review-for-unauthorized-charges)

[23. Untimely Billing by Merchant 38](#untimely-billing-by-merchant)

[24. Submit Monthly Purchase and Supporting Information to AO for
Approval
39](#submit-monthly-purchase-and-supporting-information-to-ao-for-approval)

[B. Use of the Purchase Card above the Micropurchase Threshold
39](#use-of-the-purchase-card-above-the-micropurchase-threshold)

[C. Approving Official Process 39](#approving-official-process)

[D. Convenience Checks 40](#convenience-checks)

[1. Convenience Check Policies 40](#convenience-check-policies)

[2. Checkwriter Responsibilities 43](#checkwriter-responsibilities)

[E. Property Accountability 44](#property-accountability)

[F. Purchase Card Use during Emergencies
44](#purchase-card-use-during-emergencies)

[1. Background 44](#background-1)

[2. Effect of Emergencies on Purchase Card Policies and Procedures
46](#effect-of-emergencies-on-purchase-card-policies-and-procedures)

[3. Identifying Purchases Made in Support of Emergencies
47](#identifying-purchases-made-in-support-of-emergencies)

[4. Cardholder Deployment to Emergency Locations
47](#cardholder-deployment-to-emergency-locations)

[5. Deployment Kit for Cardholders 51](#deployment-kit-for-cardholders)

[6. Cardholder Support of Emergencies from their Normal Duty Locations
52](#cardholder-support-of-emergencies-from-their-normal-duty-locations)

[IV. Oversight and Surveillance of the Purchase Card Program
55](#oversight-and-surveillance-of-the-purchase-card-program)

[A. Management Controls 55](#management-controls)

[B. Risk Management 56](#risk-management)

[C. Reviews, Surveillance, and Reporting
59](#reviews-surveillance-and-reporting)

[1. Reviews and Reporting Requirements
60](#reviews-and-reporting-requirements)

[2. Reviews by External Organizations
65](#reviews-by-external-organizations)

[D. Fraud and Misuse 65](#fraud-and-misuse)

[1. General 65](#general-1)

[2. Indicators of Fraud and Misuse 65](#indicators-of-fraud-and-misuse)

[3. Reporting Suspected Fraud or Misuse
66](#reporting-suspected-fraud-or-misuse)

[4. Potential Consequences for Purchase Card Fraud and Misuse
67](#potential-consequences-for-purchase-card-fraud-and-misuse)

[E. Refund Management 68](#refund-management)

[F. Strategic Sourcing 68](#strategic-sourcing)

[Appendix A. Authorizing Contractors' Use of GSA's SmartPay Program
A-1](#appendix-a.-authorizing-contractors-use-of-gsas-smartpay-program)

[Appendix B. Templates B-1](#appendix-b.-templates)

[Appendix C. Prohibited Purchases
C-1](#appendix-c.-prohibited-purchases)

[Appendix D. Purchases Requiring Special Attention
D-1](#appendix-d.-purchases-requiring-special-attention)

[Appendix E. Purchase Card Reviews and Reports
E-1](#appendix-e.-purchase-card-reviews-and-reports)

[Appendix F. Purchase Card Review Checklist
F-1](#appendix-f.-purchase-card-review-checklist)

[Appendix G. References and Resources
G-1](#appendix-g.-references-and-resources)

[Appendix H. HHS Purchase Card Program Points of Contact
H-1](#appendix-h.-hhs-purchase-card-program-points-of-contact)

[Appendix I. Glossary I-1](#appendix-i.-glossary)

[Appendix J. Deviations J-1](#appendix-j.-deviations)

# Overview of the Purchase Card Program

## Purpose of This Guide

> The purpose of the Department of Health and Human Services (HHS)
> Purchase Card Guide is to provide standard policies and procedures to
> all HHS Operating Divisions (OPDIVs) for using the Government purchase
> card.

## Scope and Applicability

> This guide addresses HHS' implementation of the General Services
> Administration (GSA) SmartPay® program for purchase cards issued to
> HHS employees. It does not contain guidance on use of the travel card
> or fleet card. This guide addresses policies and procedures that
> generally apply to all OPDIVs, regardless of the servicing bank.
> Bank-specific procedures are not covered. This guidance applies to all
> HHS cardholders, Approving Officials (AOs), Agency/Organization
> Program Coordinators (A/OPCs), and other officials associated with the
> HHS purchase card program. (See [I.G.](#key-responsibilities))

## Organization of This Guide

> Version 4 of the guide is organized into four major parts:

-   Part I provides an overview of the HHS purchase card program and of
    the responsibilities of the key participants.

-   Part II addresses the policies and procedures for establishing and
    maintaining purchase card accounts.

-   Part III provides guidance to cardholders for using the purchase
    card.

-   Part IV contains guidance about oversight and surveillance of the
    HHS purchase card program.

> The guide also contains ten appendices:

-   [Appendix
    A](#appendix-a.-authorizing-contractors-use-of-gsas-smartpay-program)
    contains instructions for authorizing contractors' use of the GSA
    SmartPay® program

-   [Appendix B](#appendix-b.-templates) contains templates

-   [Appendix C](#appendix-c.-prohibited-purchases) lists prohibited
    purchases

-   [Appendix D](#appendix-d.-purchases-requiring-special-attention)
    lists purchases that require special attention

-   [Appendix E](#appendix-e.-purchase-card-reviews-and-reports)
    summarizes purchase card reporting requirements and key bank reports
    used for assessing performance

-   [Appendix F](#appendix-f.-purchase-card-review-checklist) provides a
    purchase card review checklist

-   [Appendix G](#appendix-g.-references-and-resources) contains links
    to reference materials

-   [Appendix
    H](#appendix-h.-hhs-purchase-card-program-points-of-contact) lists
    the HHS key points of contact for the card program

-   [Appendix I](#appendix-i.-glossary) is a glossary of purchase card
    terms

-   [Appendix J](#appendix-j.-deviations) lists approved OPDIV
    deviations to the policies in this guide

## Effect

> This guide establishes standard purchase card policies for the entire
> Department, and serves as the basis for any OPDIV purchase card
> implementation procedures that may be developed. Any OPDIV procedures
> developed are subject to the Office of the Assistant Secretary for
> Administration and Management, Office of Acquisition Management and
> Policy (ASAM/OAMP) review, to ensure consistency -- and avoid
> redundancy -- with the guide. Once reviewed (and after any needed
> changes have been made), A/OPCs may disseminate OPDIV-specific
> procedures to their Approving Officials, and cardholders.
> OPDIV-specific procedures may include the following:

-   Supplemental procedures for working with the servicing bank and the
    servicing bank's purchase card system and software

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-   Procedures for using OPDIV systems and software related to the
    purchase card

-   Procedures for OPDIV-specific purchase card process flows

-   OPDIV-specific clearance and pre-approval requirements

-   List of OPDIV points of contact related to the purchase card program

-   Approved OPDIV deviations from, or additions to, policies in this
    guide

> **OPDIV-specific purchase card procedures must contain the minimum
> guidance necessary to implement and supplement this guide but must not
> repeat guidance contained in this document (e.g., roles and
> responsibilities, training requirements, definitions etc.).** A future
> version of the Health and Human Services Acquisition Regulation
> (HHSAR) will encompass HHS\' purchase card requirements by citing a
> URL through which the Department\'s Purchase Card Guide can be
> accessed. After that time, OPDIVs that want to implement purchase card
> policies that differ from such HHSAR requirements must submit a
> deviation request consistent with subpart 301.470 of the HHSAR.
> Administrative changes (e.g., changes involving the first five bullets
> above) do not need to be submitted for review.
>
> Pending the publication of such HHSAR requirements, any OPDIV
> deviations from, or additions to, policies in the guide must be
> submitted to ASAM/OAMP for approval.

## Background

> The Government purchase card program began in the mid-1980s as a pilot
> program and was expanded Government-wide when GSA awarded the first
> contract for card services. The Federal Acquisition Streamlining Act
> of 1994 (FASA) and Executive Order 12931, Federal Procurement Reform
> (issued in 1994) encouraged use of the purchase card for purchases up
> to the micropurchase threshold. As a result, the purchase card has
> become the preferred method for purchasing supplies and services up to
> the micropurchase threshold. This policy is set forth in Federal
> Acquisition Regulation (FAR) 13.201. The FAR currently establishes the
> micropurchase threshold at \$3,000 (\$2,500 for services subject to
> the Service Contract Act, and \$2,000 for construction). In 1998, GSA
> awarded SmartPay contracts to five banks for purchase card, travel
> card, and fleet card services offered to the Federal Government. HHS'
> contractor for providing purchase card services is U.S. Bank.
>
> The HHS purchase card program offers a number of benefits:

-   The purchase card is a streamlined method of making purchases and
    payments that reduces administrative costs to both HHS and vendors,
    while offering HHS customers a means to quickly obtain supplies and
    services.

-   The value of the Federal Government purchase card business to the
    servicing banks is so great that they are willing to offer rebates
    to departments and agencies based on the dollar value of
    transactions and prompt payment of invoices.

-   The purchase card is accepted by most vendors worldwide, and use of
    the card ensures that vendors are paid promptly. Vendors are able to
    avoid the traditionally cumbersome Government purchase order and
    payment processes.

-   The servicing banks offer purchase card software to access
    transaction details and manage accounts.

## HHS Purchase Card Program Organization

> The servicing bank uses a purchase card hierarchy that contains up to
> six management levels. The hierarchy allows for accounts to be
> established and managed at a level appropriate to the size and scope
> of the organization. The purchase card hierarchy allows the servicing
> bank to report card usage statistics at each level. The first three
> levels, as they apply to HHS, are described below:

-   Level 1 represents the Federal Government. The servicing bank is
    able to summarize purchase card data from multiple departments and
    agencies at this level. GSA manages the card program at the Federal
    level.

-   Level 2 represents HHS as a whole. The Level 2 HHS Purchase Card
    Program Coordinator is located in the Office of the Assistant
    Secretary for Administration and Management, Office of Acquisition
    Management and Policy (ASAM/OAMP).

-   Level 3 represents each HHS OPDIV. Each OPDIV with authority to
    issue purchase cards will have an A/OPC responsible for coordinating
    with the HHS Level 2 Program Coordinator and for managing the
    overall OPDIV implementation of the HHS purchase card program.

> OPDIVs may use Levels 4, 5, and 6 to establish AO and cardholder
> accounts and to organize and manage their card programs based on their
> OPDIV's structure and number of cardholders. [Appendix
> H](#appendix-h.-hhs-purchase-card-program-points-of-contact) lists the
> key HHS and OPDIV points of contact.

## Key Responsibilities

> **HHS Office of Acquisition Management and Policy:** OAMP has the
> overall responsibility for managing the HHS purchase card program,
> ensuring that the program complies with Federal and departmental laws
> and regulations and monitoring the program's effectiveness. The HHS
> A/OPC (the HHS Purchase Card Program Coordinator), who resides within
> OAMP, carries out these responsibilities, which include, but are not
> limited to, the following:

-   Establishing and issuing HHS-wide purchase card guidance

-   Issuing, suspending, and terminating cards

-   Changing A/OPC, AO, and cardholder appointments

-   Preparing HHS-wide purchase card reports

-   Representing HHS in interactions with GSA, the servicing bank, and
    other organizations

-   Reviewing and approving HHS OPDIV purchase card procedures and
    determining the impact, if any, on policies and procedures contained
    in this guide

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-   Reviewing and approving HHS OPDIV deviation requests and requests to
    modify policies set forth in this guide

-   Monitoring OPDIV implementation of the department-wide purchase card
    program, which includes conducting periodic audits, assessing card
    usage, reviewing bank reports and metrics, etc.

> **Agency/Organization Program Coordinator:** A/OPCs are responsible
> for implementing the HHS purchase card program at their respective
> OPDIVs. The following are key A/OPC responsibilities:

-   Establishing and terminating accounts

-   Issuing cards

-   Establishing default merchant category codes

-   Providing training and advice to cardholders and approving officials

-   Ensuring that training records are complete

-   Conducting surveillance of the card program by periodically auditing
    cardholder transactions

-   Reporting improper card usage to the HHS Purchase Card Program
    Coordinator

-   Monitoring card usage and deactivating cards when appropriate

-   Acting as the point of contact with the servicing bank for purchase
    card issues at the OPDIV

-   Developing OPDIV purchase card procedures as necessary

-   Requesting deviations to the purchase card policies in the HHSAR or
    modifications to the policies set forth in this Purchase Card Guide,
    as necessary

> **Billing Official:** The billing official is responsible for
> receiving and paying invoices from the servicing bank. The billing
> official also serves as a liaison between the OPDIV finance office and
> the A/OPC on purchase card matters.
>
> **Disputes Official:** The disputes official is the A/OPC, or another
> official designated by the OPDIV, who is responsible for providing
> guidance to cardholders regarding disputes and for interacting with
> the servicing bank on disputed transactions.
>
> **Approving Officials:** AOs are responsible for reviewing and
> approving all cardholder transactions under their purview to ensure
> proper use of the purchase card. AOs should be at a higher or
> equivalent grade level with respect to the cardholders under their
> purview. AOs are responsible for requesting the establishment of new
> purchase card accounts and cardholders' single purchase and monthly
> billing limits. Other duties include the following:

-   Assisting cardholders with dispute resolution

-   Ensuring that cardholders reconcile their statements and
    transactions in a timely manner

-   Verifying that cardholders maintain purchase card records

-   Requesting cancellation of cardholder accounts

-   Reconciling the cardholder's statements and transactions during
    cardholder absences

-   Reporting any suspected cases of fraud and abuse to the A/OPC

-   Reporting any lost, stolen, or compromised cards to the A/OPC

-   Notifying the OPDIV property officer of all accountable property
    acquired

-   Notifying the A/OPC of any cardholders that have transferred,
    retired, or terminated their employment; are absent without leave;
    are on extended leave (with or without pay); or have no further need
    of a purchase card. (See
    [II.E.](#_Selection_and_Appointment_of_A%2FOPCs))

-   Resolving any questionable purchases with the cardholder

-   Assigning default Common Accounting Numbers (CANs) and Object Class
    Codes (OCs) to the cardholder's account

-   Ensuring that the cardholder has used the correct CAN and OC codes
    for reconciliation of the purchases

-   Notifying the A/OPC of any administrative changes to their account,
    such as name, address, or phone number changes

-   Notifying the A/OPC prior to being reassigned or leaving the
    organization

-   Ensuring that all of the correct approvals and documentation are in
    place for the approval of the purchase

> **Cardholders:** Individual cardholders are responsible for making
> authorized purchases, maintaining required documentation, processing
> the cardholder statement, and obtaining approvals of purchases when
> required. The following are other duties of cardholders:

-   Ensuring that adequate funds are available before making purchases

-   Complying with restrictions in the prohibited purchases list
    ([Appendix C](#appendix-c.-prohibited-purchases)) and list of
    products and services that require special attention ([Appendix
    D](#appendix-d.-purchases-requiring-special-attention))

-   Obtaining required pre-purchase approvals or clearances

-   Complying with single purchase, monthly, and office dollar limits

-   Purchasing supplies or services from required sources, when
    applicable

-   Following procedures for using convenience checks

-   Verifying that purchased items have been received and keeping track
    of those that have not been received

-   Reviewing all transactions reported by the servicing bank and
    reconciling them with the corresponding purchase records

-   Resolving errors and invalid purchases with merchants

-   Disputing any unresolved invalid transactions with the servicing
    bank within the required time frame

-   Notifying the AO of disputed transactions

-   Safeguarding the purchase card and account information

-   Immediately reporting lost, stolen, or compromised cards to the
    servicing bank and notifying the AO

-   Notifying the A/OPC (with copy to the AO) of any administrative
    changes to their account, such as name, address, or phone number
    changes

-   Notifying the AO of planned reassignment, absence, or departure from
    the organization.

## Management of the HHS Purchase Card Program

> The following HHS OPDIVs are hereby authorized to implement the
> department's purchase card program:

-   Food and Drug Administration (FDA)

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-   Indian Health Service (IHS)

-   Health Resources and Services Administration (HRSA)

-   Program Support Center (PSC)

-   Agency for Healthcare Research and Quality (AHRQ)

-   Centers for Medicare and Medicaid Services (CMS)

-   Centers for Disease Control and Prevention (CDC)

-   Substance Abuse and Mental Health Services Administration (SAMHSA)

-   National Institutes of Health (NIH).

> Other HHS OPDIVs and Staff Divisions (STAFFDIVs) may obtain purchase
> card support from the PSC.

## Maintenance of This Guide

> OAMP is responsible for issuing and maintaining this guide.
> Periodically, OAMP will review the guide for currency, will update it
> as necessary, and, based upon the number and types of changes to the
> purchase card program, will determine when to issue a revised version
> of the guide. As these updates occur, OAMP will seek opportunities to
> standardize procedures where possible. OAMP will issue interim
> guidance as necessary in the form of a memo to OPDIVs/STAFFDIVs, memos
> to A/OPCs, or other appropriate means of disseminating changes.
>
> OPDIV A/OPCs should submit proposed changes to this guide to the HHS
> Program Coordinator in OAMP. Cardholders, AOs, and other users of this
> guide may send comments and suggested revisions to their A/OPC.

# Establishing and Maintaining Purchase Card Accounts

## Selection and Appointment of A/OPCs, Approving Officials, and Cardholders

#### General

> New A/OPCs will be appointed by the OPDIV Head of the Contracting
> Activity (HCA) (or designee) and will be from the OPDIV's acquisition
> organization. OPDIV components or offices are responsible for
> nominating prospective AOs and cardholders who will come under each
> AO's purview. If a component or office already has one or more
> cardholders and wishes to add another cardholder, the cognizant AO is
> responsible for nominating the new cardholder. The OPDIV A/OPC is the
> reviewing and approving authority. AOs and cardholders are not limited
> by position or grade; however, an AO should be a higher or equivalent
> grade. If a disagreement occurs between an AO and a higher-graded
> cardholder regarding the propriety of the cardholder's purchase
> action, then the matter may be forwarded to the OPDIV HCA, or
> designee, for resolution.[^1] An individual can be both a cardholder
> and an AO for a different cardholder, but cannot be the AO for his or
> her own purchase card. An AO and a cardholder cannot also serve as the
> other's cardholder and AO, respectively.
>
> Before requesting a new AO or cardholder, the requestor should
> consider the anticipated need, including ongoing requirements and
> estimated dollars, as well as the organization's purchasing history
> and patterns. These factors will determine the appropriate number of
> cards, as well as single purchase and monthly limits for each
> cardholder. The number of purchase cards requested should be the
> minimum number required to meet the organization's needs. Before
> requesting a new AO or cardholder, the requestor must ensure that all
> mandatory training has been completed by the prospective AO or
> cardholder.
>
> Only HHS employees may be appointed as A/OPCs, AOs, or cardholders
> under HHS's purchase card program. Any questions regarding who is
> considered to be an HHS employee should be resolved between the ODPIV
> A/OPC and an appropriate OPDIV Human Resource official. Contractors
> serving as A/OPCs, AOs, or cardholders under the Government-wide card
> service program can be granted authority only in accordance with FAR
> Part 51.101 (see [Appendix
> A](#appendix-a.-authorizing-contractors-use-of-gsas-smartpay-program)).
>
> The process for appointing a cardholder or AO proceeds in the
> following steps:

1.  The prospective cardholder or AO completes all required training for
    the expected purchase limits (See
    [II.B.1.](#purchase-card-training))

2.  After successfully completing the training, the prospective
    cardholder or AO signs the Cardholder and Approving Official
    Certification Statement (See [II.B.1.](#purchase-card-training))

3.  The nominating official completes a Request for New
    Cardholder/Checkwriter or Request for New Approving Official and
    sends it to the A/OPC (See
    [II.A.3.](#nominating-prospective-aos-and-cardholders))

4.  If approved, the new cardholder is issued a DPA or SF-1402 by the
    OPDIV HCA or designee, as appropriate to the level of authority
    granted. (See
    [II.A.3.](#nominating-prospective-aos-and-cardholders))

#### Emergency Purchase Cards

> Organizations may request purchase cards for emergency use without the
> need to use the cards on a recurring basis. Emergency cards are exempt
> from cancellation due to inactivity. However, emergency card issuance
> must be reviewed every 6 months to make sure issuance to designated
> cardholders is still warranted. This review is conducted in
> conjunction with the review of all inactive purchase cards (See
> [II.D.6.](#inactive-cards)).
>
> Emergency cards should be issued in advance of an emergency and placed
> with trained cardholders so that they can use the cards immediately
> upon declaration of an emergency. The cardholder's AO or other agency
> official will advise the cardholder when an emergency exists and when
> the card may be used. In appearance, emergency purchase cards are
> identical to regular purchase cards. As such, cardholders must receive
> adequate training to ensure emergency cards are used only for their
> intended purpose.
>
> The only employees eligible to receive an emergency card are those who
> have been designated as "emergency employees" or "mission-critical
> emergency employees" under an emergency response plan or continuity of
> operations plan (COOP) and those who are active duty officers in the
> Public Health Services' Commissioned Corps. The use of a purchase card
> solely as a "backup card" for another cardholder is not considered an
> emergency use and is not permitted.
>
> Emergency cards should be requested with single purchase limits
> sufficient to cover the intended use, and the cardholder should be at
> an organizational level commensurate with the responsibilities of
> holding a card with fewer restrictions and potentially higher purchase
> limits. Emergency cards may be issued with fewer merchant category
> code restrictions than a normal card in order to allow the user
> greater flexibility during an emergency. Convenience checks (see
> [III.D](#convenience-checks)) may also be requested to accompany the
> emergency card. Convenience checks may be appropriate for emergencies
> because they offer the user an alternative means to pay vendors in
> case the commercial credit card network is inoperable due to
> electricity or telecommunication outages or to make emergency
> purchases with vendors who do not accept credit cards.
>
> Requests for emergency cards must contain an appropriate
> justification, citing the anticipated circumstances under which they
> would be used. As an example, an emergency card might be appropriate
> for individuals who are deployed following a bioterrorism event and
> require a card to perform their duties. Before being issued an
> emergency card, prospective emergency cardholders must receive the
> appropriate training commensurate with the purchase limits on the card
> (see [II.B](#_Selection_and_Appointment_of_A%2FOPCs)).
>
> Cardholders with regular (non-emergency) cards may continue to use
> their cards during an emergency to purchase products and services in
> accordance with the limits on their cards. See
> [III.A.5.](#determine-if-purchase-is-within-dollar-limits) for
> increased purchase card thresholds during contingency operations or
> nuclear, biological, chemical, or radiological incidents. See
> [III.F.](#purchase-card-use-during-emergencies) for guidance in using
> both emergency and regular purchase cards during emergencies.

#### Nominating Prospective AOs and Cardholders

> AOs and other officials who nominate prospective cardholders should
> consider individuals who have the judgment, character, reputation, and
> adequate business acumen to be entrusted with a purchase card.

-   New AOs must be nominated by an OPDIV official above the level of
    the AO. New cardholders must be nominated by their prospective AO or
    by an OPDIV official above the level of the AO. The templates for
    nominating new cardholders and AOs are found at [Appendix
    B](#appendix-b.-templates). OPDIVs are required to use these
    templates, but may add any other administrative information required
    by the OPDIV. Nominations must be sent to the A/OPC of the
    card-issuing OPDIV, and may be completed electronically and sent by
    e-mail without the need to obtain signatures.

> Prospective cardholders who are approved to receive a purchase card
> will be issued a delegation of procurement authority (DPA) from the
> cognizant HCA (or designee) after successfully completing all required
> training. The DPA will contain the cardholder's official spending
> limits and any other restrictions deemed appropriate by the A/OPC.
> ([Appendix B](#appendix-b.-templates) contains the standard DPA
> template for authority up to the micropurchase threshold.) For
> delegations exceeding the micropurchase threshold, the delegation must
> be issued on a Standard Form 1402, *Certificate of Appointment*,
> appropriately tailored to reflect the purchase card limits and any
> other card restrictions.

## Training Requirements

#### Purchase Card Training

> All prospective A/OPCs, AOs, and cardholders, regardless of job
> series, must be trained before being appointed to the program. HHS'
> purchase card training is based on guidance in Office of Management
> and Budget (OMB) Circular A-123, Appendix B ("Training Requirements
> for Participation in Federal Charge Card Program"). The objective of
> the training program is to ensure that A/OPCs, AOs, and cardholders
> are well-versed with respect to procurement laws and regulations and
> with internal departmental policies that impact purchases and payments
> made with the Government purchase card.
>
> Training must be commensurate with the level of responsibility or DPA.
> Training for AOs and cardholders must address their respective
> responsibilities, prohibited purchases, purchase limitations,
> applicable policies and regulations, and sources of supply. Training
> for A/OPCs must provide an understanding of AO and cardholder
> responsibilities, proper card management, and control and oversight
> tools and techniques. Purchase card training must address policies and
> procedures for Section 508 of the Rehabilitation Act of 1973 and for
> "green" purchasing, which is related to the environmental quality of
> products and services procured with the purchase card. **To continue
> participating in the purchase card program, A/OPCs, AOs, and
> cardholders must receive refresher training every year.**
>
> Table 1 summarizes the HHS purchase card training program required for
> different levels of authority.

+--------+----------------------+-------------------------------------+
| *Ta    |                      |                                     |
| ble 1. |                      |                                     |
| HHS    |                      |                                     |
| Pu     |                      |                                     |
| rchase |                      |                                     |
| Card   |                      |                                     |
| Tr     |                      |                                     |
| aining |                      |                                     |
| Pr     |                      |                                     |
| ogram, |                      |                                     |
| by     |                      |                                     |
| Aut    |                      |                                     |
| hority |                      |                                     |
| Level* |                      |                                     |
+========+======================+=====================================+
| Author | Program participant  | Required training^b^                |
| ity^a^ |                      |                                     |
+--------+----------------------+-------------------------------------+
| Up to  | Prospective/newly    | Basic purchase card training (HHS   |
| \      | appointed purchase   | University course or an OPDIV       |
| $3,000 | cardholders and      | equivalent course)                  |
|        | Approving Officials  |                                     |
+--------+----------------------+-------------------------------------+
|        | Purchase card        | Yearly refresher purchase card      |
|        | holders and          | training.                           |
|        | Approving Officials  |                                     |
+--------+----------------------+-------------------------------------+
| \      | Prospective/newly    | -   Basic purchase card training    |
| $3,001 | appointed purchase   |     (HHS University course or an    |
| to     | cardholders and      |     equivalent)                     |
| \$     | Approving Officials  |                                     |
| 25,000 |                      | -   Basic simplified acquisition    |
|        |                      |     procedures(e.g., DAU's CON 237) |
|        |                      |                                     |
|        |                      | -   Advanced simplified acquisition |
|        |                      |     procedures or Appropriations    |
|        |                      |     law                             |
+--------+----------------------+-------------------------------------+
|        | Purchase card        | Yearly refresher purchase card      |
|        | holders and          | training.                           |
|        | Approving Officials  |                                     |
+--------+----------------------+-------------------------------------+
| \$     | Prospective/newly    | -   Basic purchase card training    |
| 25,001 | appointed purchase   |     (HHS University course or an    |
| to     | cardholders and      |     OPDIV equivalent course)        |
| \$1    | Approving Officials  |                                     |
| 00,000 |                      | -   Basic simplified acquisition    |
|        |                      |     procedures (e.g., DAU's CON     |
|        |                      |     237)                            |
|        |                      |                                     |
|        |                      | -   Advanced simplified acquisition |
|        |                      |     procedures or Appropriations    |
|        |                      |     law                             |
|        |                      |                                     |
|        |                      | -   CON 100 (Shaping Smart Business |
|        |                      |     Arrangements)                   |
|        |                      |                                     |
|        |                      | -   CON 110 (Mission Support        |
|        |                      |     Planning)                       |
+--------+----------------------+-------------------------------------+
|        | Purchase cardholders | Yearly refresher purchase card      |
|        | and Approving        | training                            |
|        | Officials            |                                     |
+--------+----------------------+-------------------------------------+
| Not    | Prospective/newly    | -   Basic purchase card training    |
| appl   | appointed            |     (HHS University course or an    |
| icable | Agency/Organization  |     OPDIV equivalent course)        |
|        | Program Coordinators |                                     |
|        |                      | -   Basic simplified acquisition    |
|        |                      |     procedures or DAU's CON 237     |
|        |                      |                                     |
|        |                      | -   Advanced simplified acquisition |
|        |                      |     procedures or appropriations    |
|        |                      |     law                             |
|        |                      |                                     |
|        |                      | -   CON 100 (Shaping Smart Business |
|        |                      |     Arrangements)                   |
|        |                      |                                     |
|        |                      | -   CON 110 (Mission Support        |
|        |                      |     Planning).                      |
+--------+----------------------+-------------------------------------+
|        | Agency/Organization  | Yearly refresher purchase card      |
|        | Program Coordinators | training (attendance at GSA's       |
|        |                      | annual training conference          |
|        |                      | satisfies refresher training).      |
+--------+----------------------+-------------------------------------+
| ^a^    |                      |                                     |
| Cardh  |                      |                                     |
| olders |                      |                                     |
| and    |                      |                                     |
| App    |                      |                                     |
| roving |                      |                                     |
| Off    |                      |                                     |
| icials |                      |                                     |
| with   |                      |                                     |
| auth   |                      |                                     |
| orized |                      |                                     |
| inc    |                      |                                     |
| reases |                      |                                     |
| in DPA |                      |                                     |
| have   |                      |                                     |
| up to  |                      |                                     |
| 6      |                      |                                     |
| months |                      |                                     |
| to     |                      |                                     |
| co     |                      |                                     |
| mplete |                      |                                     |
| the    |                      |                                     |
| tr     |                      |                                     |
| aining |                      |                                     |
| requir |                      |                                     |
| ements |                      |                                     |
| for    |                      |                                     |
| the    |                      |                                     |
| new    |                      |                                     |
| DPA.   |                      |                                     |
|        |                      |                                     |
| ^b^    |                      |                                     |
| CON    |                      |                                     |
| 237,   |                      |                                     |
| CON    |                      |                                     |
| 100,   |                      |                                     |
| and    |                      |                                     |
| CON    |                      |                                     |
| 110    |                      |                                     |
| are    |                      |                                     |
| ava    |                      |                                     |
| ilable |                      |                                     |
| at the |                      |                                     |
| DAU    |                      |                                     |
| w      |                      |                                     |
| ebsite |                      |                                     |
| at     |                      |                                     |
| <http: |                      |                                     |
| //www. |                      |                                     |
| dau.mi |                      |                                     |
| l/regi |                      |                                     |
| strar/ |                      |                                     |
| enroll |                      |                                     |
| .asp>. |                      |                                     |
| CON    |                      |                                     |
| 100 is |                      |                                     |
| also   |                      |                                     |
| o      |                      |                                     |
| ffered |                      |                                     |
| t      |                      |                                     |
| hrough |                      |                                     |
| HHS    |                      |                                     |
| Univ   |                      |                                     |
| ersity |                      |                                     |
| (see   |                      |                                     |
| w      |                      |                                     |
| ebsite |                      |                                     |
| at:    |                      |                                     |
| [      |                      |                                     |
| http:/ |                      |                                     |
| /learn |                      |                                     |
| ing.hh |                      |                                     |
| s.gov] |                      |                                     |
| (http: |                      |                                     |
| //www. |                      |                                     |
| dau.mi |                      |                                     |
| l/regi |                      |                                     |
| strar/ |                      |                                     |
| enroll |                      |                                     |
| .asp.  |                      |                                     |
|  CON 1 |                      |                                     |
| 00 is  |                      |                                     |
| also o |                      |                                     |
| ffered |                      |                                     |
|  throh |                      |                                     |
| ttp:/l |                      |                                     |
| earnin |                      |                                     |
| g.hhs. |                      |                                     |
| gov)). |                      |                                     |
+--------+----------------------+-------------------------------------+
|        |                      |                                     |
+--------+----------------------+-------------------------------------+

> After successfully completing the basic purchase card training, each
> AO and cardholder must sign the standard certification statement
> certifying that he or she has read, has understood, and agrees to
> abide by all terms and conditions governing the GSA SmartPay program.
> ([Appendix B](#appendix-b.-templates), Cardholder and Approving
> Official Training Certification contain the template.) The cardholder
> or AO then forwards the signed statement to the A/OPC, who retains the
> statement in the A/OPC files. A DPA will not be issued without this
> signed statement on file.

#### Training Audit Procedures

> A/OPCs are responsible for maintaining a list of all AOs and
> cardholders within their OPDIV and documenting whether they have
> completed their required training and refresher training (successful
> completion of purchase card training, refresher purchase card
> training, green-purchasing training, and other courses as noted).
> Failure to take the required training will result in the suspension,
> revocation, or non-issuance of a purchase card to an employee. The
> A/OPC must retain a copy of all training documentation while the
> cardholder or AO account is open and for 3 years after the account is
> closed.

#### Remedial Training

> Remedial training may be used as one of the disciplinary options for
> A/OPCs, AOs, and cardholders. Remedial training involves retaking the
> basic purchase card training and other requisite training.

## Account Setup

#### Purchase Cards

> After successfully completing required training, AOs and cardholders
> must submit their application information to the A/OPC in accordance
> with the guidance in [II.A.](#_Selection_and_Appointment_of_A/OPCs)
> and [II.B.](#_Selection_and_Appointment_of_A%2FOPCs), and any
> OPDIV-specific procedures. The A/OPC will enter the card setup
> information in the servicing bank's system.
>
> Upon receipt of the card setup information, the servicing bank will
> mail the card to the A/OPC or the cardholder as determined by OPDIV
> procedure. If mailed to the A/OPC, the A/OPC will deliver the card to
> the cardholder. Immediately upon receipt of the card, the cardholder
> must verify the accuracy of his or her name and address, sign the
> card, and follow the servicing bank's procedures to activate the card.
>
> The card has a unique design, as specified in the GSA SmartPay
> contract, to help distinguish the card from regular credit cards. The
> card contains the phrases "For Official U.S. Government Purchases
> Only" and "U.S. Government Tax Exempt." The card has a red strip along
> the top, bears the Great Seal of the United States, and has "United
> States of America" printed across the face of the card.
>
> The card is embossed with the cardholder's name and account number.
> The reverse side of the card contains a space for the cardholder's
> signature and is also stamped with the account number followed by a
> three-digit security code. Some vendors may ask for this code during a
> purchase transaction. The servicing bank's toll-free number is also
> printed on the back of the card.

#### AO Accounts

> After the prospective AO successfully completes training, the
> nominating official must submit the AO's application information to
> the A/OPC in accordance with OPDIV procedures. The A/OPC will enter
> the AO account setup information in the servicing bank's system. The
> servicing bank will then assign an account number to the AO.
>
> A/OPCs must determine manageable spans of control (the ratio of
> cardholders to AO) based on consultation with the nominating official
> and/or AO. In making this determination, the transaction volume of all
> existing or prospective cardholders under the AO should be considered.

## Account Maintenance

#### Changes in Cardholder Status

> [Transfer, Retirement, Resignation or Termination]{.underline}:
> Cardholders should stop using the card far enough in advance of their
> separation date, if possible, to allow all outstanding transactions to
> be processed before their separation. The cardholder must destroy his
> or her card by cutting it in half, provide the cut card to the AO, and
> advise the AO of any outstanding transactions. The cardholder must
> also give the AO any remaining receipts or other documents related to
> outstanding transactions. The AO will determine when to close the
> account based on the outstanding transactions and will notify the
> A/OPC when the account is ready to be closed. The servicing bank can
> still submit invoices for any transactions that have been paid through
> the VISA system before the account was closed by the A/OPC. A new
> purchase card account must be established if the transferred employee
> is to be a cardholder in another HHS organization.
>
> In the event of cardholder death or disability, the AO is responsible
> for reconciling and approving any outstanding cardholder transactions.
> The AO will then notify the A/OPC to cancel the cardholder's account.
> Retrieval and destruction of the purchase card is not required in
> these cases.

#### Changes in AO Status

> Before an AO leaves the organization, the AO's supervisor or other
> organizational official should nominate a new AO or advise the A/OPC
> to transfer the cardholder accounts to another AO. If it is not
> possible to establish a new or permanent replacement AO before the
> current AO leaves the organization, the A/OPC may recommend the
> designation of another AO to assume the former AO's duties until a
> permanent replacement is appointed.

#### Administrative Changes to Cardholder and AO Accounts

> Cardholders are responsible for advising their A/OPCs (with a copy to
> their AO) of any administrative changes to their account, such as
> name, address, or phone number. AOs are responsible for advising the
> A/OPC of administrative changes to their account. A/OPCs are
> responsible for updating the servicing bank's records with the new
> information.

#### Changes to Account Dollar Limits

> Instances may arise when it becomes necessary to revise a cardholder's
> single purchase limit or monthly purchase limit. Requests to change a
> cardholder's single purchase limit must be submitted by the AO to the
> A/OPC with an appropriate justification. Changes to a cardholder's
> single purchase limit require that a new DPA or SF-1402 be issued by
> the organization's HCA or designee. Requested changes that would raise
> the cardholder's single purchase limit above the micropurchase
> threshold require that the cardholder meet all training and
> certification requirements for the requested dollar level (see
> [II.B.](#_Selection_and_Appointment_of_A%2FOPCs)).
>
> The AO may request changes to the cardholder's monthly purchase limit
> by sending a request to the A/OPC. In setting a cardholder's monthly
> purchase limit, the AO must consider the office's budget for
> purchases, as well as the other cardholders' monthly purchase limits.
> The office's monthly purchase limit is the sum of the individual
> cardholders' monthly limits.
>
> In addition to purchase limits established by AOs, the servicing bank
> may place its own limits on purchase amounts and number of
> transactions (known as floor limits or daily limits). Cardholders that
> exceed these limits may experience declined transactions. In such
> cases, the A/OPC will coordinate with the program office and servicing
> bank, as necessary, if the bank limits need to be temporarily
> overridden.

#### Other Changes to Accounts

> AOs may request changes to cardholders' default CANs by sending a
> request to the A/OPC. AOs and cardholders may add or change the OCs
> associated with their accounts. AOs are responsible for ensuring that
> the correct codes are associated with each cardholder transaction.
>
> AOs may also request additions to, or deletions from, the list of
> authorized merchant category codes from which a cardholder may
> purchase. AOs send these requests to the A/OPC. AOs should also advise
> the A/OPC of issues or problems involving merchants and merchant
> category codes, such as merchants with incorrect codes or merchants
> that may be using another merchant's account. The A/OPC will
> investigate these situations and request merchants to correct coding
> errors. For legitimate transactions with merchants that have coding
> errors, A/OPCs should contact the servicing bank to temporarily
> unblock the merchant code (if necessary), and have the cardholder
> document their purchase file.

#### Inactive Cards

> A/OPCs are responsible for reviewing purchase card usage within their
> organizations and identifying any purchase card accounts that appear
> to be inactive, other than cards specifically requested for emergency
> use. A/OPCs must perform this review at least semi-annually. The
> guideline for "inactive" is any account that does not have any
> transactions within the preceding 6 months. A/OPCs must provide AOs
> with a list of inactive card accounts and request that they complete
> and sign the "Status of Inactive or Emergency Purchase Card" template
> for each inactive cardholder (see [Appendix
> B](#appendix-b.-templates)) to determine whether there is sufficient
> justification to retain the inactive accounts. Normally, inactive
> cards should be canceled unless there are extenuating circumstances,
> such as reasonable expectation of future purchase requirements, or a
> history of requirements that have irregular buying patterns. Failure
> to complete the form will result in cancellation of the card in
> question. AOs will return the forms to the A/OPC, who, in turn,
> cancels those cards that are no longer needed and retains the forms in
> his or her purchase card records until the cards are either canceled
> or are no longer considered inactive.
>
> A/OPCs are required to maintain a record of emergency purchase
> cardholders. Emergency cards, which may remain inactive until an
> emergency is declared, are reviewed at the same time as other inactive
> cards. The purpose of this review is to verify that the cardholder is
> still employed with the agency, has possession of the card, and is
> still designated as an emergency or mission-critical employee, or is a
> member of the Commissioned Corps. A/OPCs shall cancel emergency cards
> when any of those conditions are not present.

## Account Suspension and Termination

#### Account Suspension

> The preferred HHS approach for paying the servicing bank's invoices is
> to pay the bank's invoice without regard to any disputed or
> unreconciled transaction and attempt any corrections after the fact
> ("pay and chase"). This approach maximizes HHS' rebates from the
> servicing bank. OPDIVs using the "pay-and-chase" approach will not
> have cardholders' accounts suspended because there will be no
> delinquent payments.
>
> OPDIVs that do not use the "pay-and-chase" approach may have
> cardholder accounts suspended for delinquent payments. The servicing
> bank may initiate suspension of an account if payment for undisputed
> principal amounts has not been received 45 days from the billing date.
> The servicing bank will provide the A/OPC with a report identifying
> the undisputed amount that is overdue. If payment is not received 55
> days after the billing date and the servicing bank decides to pursue
> suspension, the bank will notify the A/OPC of its intent to suspend
> the account. If payment is not received by the 61st day after the
> billing date, the servicing bank may then suspend the account. To
> avoid suspension, all AOs and cardholders are expected to reconcile
> their accounts promptly after the billing date.
>
> In addition to any bank-initiated card suspensions for delinquent
> accounts, the ASAM/OAMP or the A/OPC may suspend a cardholder's
> account as a disciplinary method for improper card use or failure to
> adequately perform his or her cardholder duties. Before taking this
> action, the ASAM/OAMP or the A/OPC must consider the impact of a
> cardholder's suspension on the affected organization and take
> appropriate steps to minimize any adverse impact.
>
> ASAM/OAMP or A/OPCs may also use temporary card suspension
> (deactivation) as a risk-management tool to prevent suspected card
> misuse.[^2] AOs may request a temporary suspension or deactivation if
> the cardholder is expected to be away from the office for more than 5
> consecutive weeks. This would include long vacations, training,
> temporary duty assignments, leaves of absence, and medical leave. Upon
> the cardholder's return, the A/OPC can reinstate the card if the need
> still exists. AOs are responsible for notifying A/OPCs of cardholders'
> expected absences and of their return. In determining whether to
> temporarily suspend cards, A/OPCs will consider whether the benefits
> in risk reduction exceed the administrative costs of processing
> temporary suspensions/deactivations and reinstatements.

#### Account Termination

> For OPDIVs that do not use the "pay-and-chase" method for paying the
> bank's invoices, the servicing bank may initiate cancellation of an
> account if it has been suspended twice within the preceding 12 months
> and is currently delinquent. The servicing bank may also cancel
> accounts that have been past due for 120 calendar days beyond the
> billing date.
>
> In addition to cardholder and AO transfers, retirement, or other
> separation from the organization, ASAM/OAMP or A/OPCs may terminate
> cardholder or AO accounts for the following reasons:

-   As a disciplinary method for improper use of the card

-   For failure of the AO or cardholder to carry out their
    responsibilities

-   For failure to complete the required training

-   When an organization's requirements no longer justify the need for a
    card

-   Upon request of the AO or cardholder when they are no longer willing
    or able to carry out their responsibilities under the HHS purchase
    card program

```{=html}
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```
-   Upon direction by OPDIV management or ASAM/OAMP

> Prior to terminating a cardholder's account, the A/OPC shall review
> the account to determine if there are any pending charges that have
> not yet been processed by the VISA's system. Any charges that a
> merchant attempts to process after a card is cancelled will be
> declined by the VISA system. Depending on the circumstances, the A/OPC
> shall instruct the AO to contact the merchant and advise the merchant
> on how to proceed (process the charge, cancel the order, use a
> different account number, etc.).
>
> After termination of a cardholder's account, the HCA or designee will
> revoke the cardholder's delegation of procurement authority (unless
> the individual also has authority to use non-card procurement
> methods). Upon termination, the cardholder is responsible for
> destroying the card by cutting it in half or shredding it.

#### Reinstatement

> A/OPCs may reinstate cardholders and AOs whose accounts have been
> suspended, based upon an assessment of the circumstances. If an AO or
> cardholder has had an account suspended or terminated for 12 months or
> more and the account needs to be reinstated, the AO or cardholder must
> retake the basic purchase card training.

## Card and Account Security

> Cardholders are responsible for security of the purchase card and
> account number and may be held personally responsible for misuse.
> Purchase card DPAs are not transferable and acquisition regulations
> prohibit purchase cards from being passed on to others to use.
> Cardholders are responsible for preventing others from gaining access
> to their cards or account information. The purchase card should be
> kept on the cardholder's person, as this will allow the cardholder to
> continue making purchases in the event of a building closure or other
> emergency that prevents the cardholder from being at their work site.
> Account information should be given only to vendors to complete a
> purchase transaction. The servicing bank's telephone number, which
> appears on the card, should also be written down so that the
> cardholder may quickly contact the bank in case the card is lost or
> stolen.
>
> If the card is lost or stolen, the cardholder must immediately notify
> the AO, A/OPC, and, by telephone, the servicing bank. If the
> cardholder believes the card was stolen, he or she must also
> immediately report the theft to the organization's security office if
> the theft occurred at an HHS facility or to the local police if the
> theft occurred off-site. HHS will not be liable for unauthorized use
> of the card; however, the cardholder may be held accountable for
> failure to report the loss of a card as soon as the cardholder becomes
> aware of the loss. To formally document the loss or theft, the call to
> the servicing bank must be followed by a written notice to the A/OPC
> that contains the following information:

-   Card number

-   Cardholder's complete name

-   Date and location of the loss

-   Date reported to police (if stolen)

-   Date and time the loss was reported to the servicing bank

-   List of any transactions made on the date the card was lost or
    stolen

```{=html}
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```
-   Any other relevant information describing the loss or theft

> The servicing bank will issue a replacement card with a new account
> number, usually within 24 hours. If a lost card is found after
> receiving a replacement card, it is no longer valid and must be
> destroyed by cutting it in half or shredding it.

# Using the Purchase Card

## Cardholder Process for Micropurchases

> Figure 1 depicts the cardholder process for micropurchases. Each major
> step is numbered and discussed in greater detail below.

#### Determine Eligibility for Card Purchase

> The first question the cardholder should ask is whether Federal funds
> can be used to buy the product or service. [Appendix
> C](#appendix-c.-prohibited-purchases) lists the products and services
> that cannot be purchased at all. The next question the cardholder
> should ask is whether the purchase card can be used to purchase the
> product or service. [Appendix
> D](#appendix-d.-purchases-requiring-special-attention) lists products
> and services that require special attention. Some products or services
> can only be purchased with the card under very limited circumstances.
> Others may be purchased with the card provided the necessary
> pre-approvals or clearances are obtained before the purchase is made.
>
> Cardholders should also review their OPDIV's supplementation to this
> guide for any special restrictions or variances from [Appendix
> C](#appendix-c.-prohibited-purchases) and
> [D](#appendix-d.-purchases-requiring-special-attention). Products and
> services not specifically mentioned in [Appendix
> C](#appendix-c.-prohibited-purchases) or
> [D](#appendix-d.-purchases-requiring-special-attention), or in OPDIV
> supplementation, may be purchased using the card if consistent with
> Federal and HHS purchase card regulations and guidance, and if not
> otherwise limited by the OPDIV.
>
> If the product or service cannot be purchased using the card, the
> cardholder should advise the customer (if applicable) that the
> requirement may be purchased by the OPDIV contracting office.
> Requirements ineligible for purchase using the card should be sent to
> the OPDIV contracting office.

#### Initiate Purchase Process

> **Prior to initiating a purchase transaction using the purchase card,
> the account holder must obtain written pre-approval from her or his
> supervisor, AO, A/OPC, or higher authority.** Written pre-approval may
> be in the form of an e-mail, memo/note, etc., certifying that the
> proposed purchase is for a legitimate need of the government and not
> for personal benefit. A copy of the written pre-approval must be
> retained in the purchase file.
>
> After verifying the legitimacy of the purchase, the cardholder must
> comply with any OPDIV procedures for documenting the purchase request,
> whether it is through an automated or hard-copy process. Before making
> the purchase, the cardholder must obtain any additional approvals or
> clearances required by [Appendix
> D](#appendix-d.-purchases-requiring-special-attention) of this guide
> or by OPDIV procedures.

*Figure 1. Cardholder Process for Micropurchases*

![](media/image2.wmf){width="6.313194444444444in"
height="8.625694444444445in"}

#### Review Requirements and Plan Purchase

> Whether buying a product or service on behalf of another customer, or
> for the cardholder's own needs, the cardholder should review the
> requirements to make sure the product or service is adequately
> described so that a vendor will clearly understand what is required.
>
> The purchase card is intended to purchase standard, commercial, and
> off-the-shelf products and services. The card must not be used to
> purchase products that require modifications to meet the customer's
> needs or to purchase complex services that require a statement of work
> or that must be altered in any way to meet the customer's
> requirements. Customized products or services are to be purchased by
> the OPDIV's contracting office. The cardholder is also not permitted
> to use the purchase card for products or services that must be
> delivered or performed at different times in the future (partial
> deliveries or performance). (See
> [III.A.11](#ensure-merchant-bills-only-upon-shipment) for related
> coverage of backorders and exceptions.)
>
> During each monthly billing cycle, the cardholder should plan
> purchases to maximize the benefit to the Government and the customer.
> For example, repetitive requests for the same product should be
> consolidated to obtain a better price from the vendor and to reduce
> the number of transactions. However, the urgency of the requirement
> should also be considered and purchases made accordingly. If a
> requirement exceeds the cardholder's single purchase or monthly limit,
> the cardholder must not divide the requirement into two or more
> smaller requirements to avoid exceeding the limit. Doing so is not
> only a misuse of purchase card authority, but is prohibited by the
> Federal Acquisition Regulation. The cardholder should refer any
> requirement that exceeds his or her purchase card authority to the
> OPDIV's contracting office for purchase.

#### Determine if Funding is Adequate

> Depending on the OPDIV's policies, the card may have been assigned a
> default CAN to ensure that any purchases will have adequate funding.
> If the OPDIV has not assigned a default CAN, then the cardholder must
> follow the OPDIV's procedure for obtaining any funding pre-approvals.
> If in doubt, the cardholder should check with the AO. Funding levels
> can sometimes be uncertain at the end and beginning of a fiscal year,
> so it is particularly important to verify the availability of funding
> during these times.
>
> The cardholder must also ensure that the product or service to be
> purchased meets a bona fide need of the organization. The bona fide
> needs rule of appropriations law says that a fiscal year's
> appropriations must be used only for a legitimate need that arises
> during the year for which the appropriation was made. The cardholder
> must use current-year funding to purchase items that are needed during
> the current fiscal year. For these products or services, the
> cardholder may accept receipt or delivery of the products or services
> in the next fiscal year, for example, a product purchased in late
> September can be accepted in October. However, current-year money must
> not be used to purchase products or services that will not be needed
> until the next fiscal year.
>
> The bona fide needs rule has some limited exceptions, such as a
> subscription or license renewal that will be delivered or become
> effective during the next fiscal year. The A/OPC can provide guidance
> on whether the requirement is for bona fide needs in the current
> fiscal year.

#### Determine if Purchase is Within Dollar Limits

> The cardholder must ensure that adequate funding is available to make
> the purchase, and must then determine whether the product or service
> can be purchased under the single purchase limit and will not exceed
> the monthly purchase limit. If the purchase cannot be made under the
> dollar limits (and there are no other cardholders in the office who
> can make the purchase under their limits), the cardholder should
> notify the customer to submit the requirement to the contracting
> office. The requirement must not be split into two or more separate
> requirements to avoid exceeding the single purchase limit. This
> practice is a violation of FAR 13.003(c)(2), an extract of which
> states the following:
>
> Do not break down requirements aggregating more than
> the...micropurchase threshold into several purchases that are less
> than the applicable threshold merely to...avoid any requirement that
> applies to purchases exceeding the micropurchase threshold.
>
> In some cases, determining whether a purchase is a split purchase or
> not can be difficult. The following examples illustrate several cases.

  -------------------------------------------------------------------------
  Situation\                   Determination   Rationale
  Assume cardholder has a\                     
  \$3,000 single purchase                      
  limit                                        
  ---------------------------- --------------- ----------------------------
  **Cardholder receives a      **Not a split   **The cardholder was not
  requirement for an item      purchase**      aware of the second
  costing \$2,000 today and                    requirement when the first
  makes the purchase. Later in                 purchase was made. Had the
  the day, the cardholder                      cardholder received both
  receives another requirement                 requisitions at the same
  for the same item. The                       time, the proper action
  cardholder was not aware of                  would have been to
  the second requirement at                    consolidate the
  the time the first purchase                  requirements, and forward to
  was made.**                                  the contracting office if
                                               the cost exceeded the
                                               cardholder's single purchase
                                               limit.**

  **Cardholder receives a      **Not a split   **Although the single
  request for multiple items.  purchase**      requirement exceeded the
  The total exceeds \$3,000,                   cardholder's limit, the
  but not all items are                        cardholder could not obtain
  available from a single                      all of the items from the
  vendor. When making the                      same vendor. There was no
  purchases from each vendor,                  intent on the part of the
  the individual purchases                     cardholder to split the
  will not exceed \$3.000. The                 purchase just to avoid the
  cardholder makes the                         single purchase limit,
  purchases from different                     therefore, this is not
  vendors.**                                   considered a split
                                               purchase.**

  **The cardholder has a       **Split         **The cardholder split the
  requirement to have three    purchase**      purchase requirement, which
  office areas painted. Each                   totaled \$6,000, into three
  area will cost \$2,000. The                  smaller purchases solely for
  cardholder decides to issue                  the purpose of allowing the
  three separate purchases for                 purchases to be made under
  the work.**                                  the cardholder's purchase
                                               limit. The proper course of
                                               action would have been to
                                               forward the requirement to
                                               the contracting office for
                                               purchase.**

  **Cardholder receives a      **Split         **The shipping destination
  requirement for five         purchase**      alone is not a valid reason
  identical products, each                     to split a requirement into
  costing \$1,000 and                          multiple purchases. The
  available from the same                      proper course of action
  vendor, but needing delivery                 would have been to
  to five different locations.                 consolidate the requirements
  Cardholder elects to make                    and forward to the
  five separate purchases.**                   contracting office for
                                               purchase.**

  **Cardholder has a           **Not a split   **The cardholder made a good
  requirement for two          purchase**      business decision by using
  products, each of which is                   two vendors instead of one,
  available from the same                      saving \$1,000. Because the
  vendor. The total cost will                  cardholder had no intent to
  be \$4,000. However, the                     split the purchase just to
  cardholder knows that one of                 avoid the single purchase
  the items can be obtained                    limit, this is not
  from another vendor at                       considered a split
  substantially less cost. If                  purchase.**
  the cardholder purchases                     
  from two vendors, the total                  
  cost will be \$3,000.**                      
  -------------------------------------------------------------------------

> Cardholders who are unsure whether they have a split purchase should
> contact their A/OPC for guidance. Cardholders who deliberately violate
> the FAR requirements regarding split purchases will have their card
> accounts cancelled and may face other disciplinary measures.
>
> **[Changes to Purchase Limits during Emergencies or Contingency
> Operations]{.underline}**
>
> Congress may pass legislation that temporarily raises the
> micropurchase threshold under certain circumstances, such as purchases
> in support of hurricane relief. The President may also declare a
> national emergency, which may allow for higher purchase limits.
> Further, the Federal Acquisition Regulation permits a cardholder's
> single purchase limit to be raised in support of contingency
> operations or to prevent or recover from nuclear, biological,
> chemical, or radiological attack.
>
> In cases such as those above, purchase limits are not automatically
> increased. Cardholders will be advised of any changes to their
> purchase card limits through their A/OPC or other HHS memo or
> directive. The A/OPC also will notify cardholders when the emergency
> conditions no longer exist and purchase limits revert to their
> original amounts. See [III.F.](#purchase-card-use-during-emergencies)
> for detailed guidance on using the card during emergencies.

#### Check Required Sources for Product/Service

> Purchase card transactions are subject to FAR Part 8 regarding the use
> of required sources. Before a product or service can be purchased on
> the open market, the cardholder must first determine if it can be
> obtained from or through one of the required sources. The order of
> priority differs depending on whether a product or a service is being
> purchased. If a product or service is available from a higher priority
> source, it should be purchased from that source instead of a lower
> priority source. If the product or service is available from one of
> the required sources, but the cardholder determines not to purchase
> from that source due to price, quantity, delivery time, quality, or
> other reason, he or she must comply with any waiver requirements for
> that source contained in FAR Part 8 before purchasing the product or
> service from a lower-priority source. Table 2 and 3 indicate the
> priorities and required sources for products and services. The full
> text web addresses for the hyperlinks in the tables are found in
> [Appendix G](#appendix-g.-references-and-resources).

+------+---------------------------------------------------------------+
| *T   |                                                               |
| able |                                                               |
| 2.   |                                                               |
| Requ |                                                               |
| ired |                                                               |
| Sou  |                                                               |
| rces |                                                               |
| for  |                                                               |
| P    |                                                               |
| rodu |                                                               |
| cts* |                                                               |
+======+===============================================================+
| **   | **Required Sources for Products (Supplies)**                  |
| Prio |                                                               |
| rity |                                                               |
| Ord  |                                                               |
| er** |                                                               |
+------+---------------------------------------------------------------+
| 1\.  | HHS and OPDIV inventories. Check local storerooms/inventories |
|      | for availability prior to purchasing new products.            |
+------+---------------------------------------------------------------+
| 2\.  | [Excess from other                                            |
|      | agencies](http:/                                              |
|      | /www.gsa.gov/Portal/gsa/ep/channelView.do?pageTypeId=8211&cha |
|      | nnelPage=%2Fep%2Fchannel%2FgsaOverview.jsp&channelId=-13014). |
|      | The GSA maintains lists of excess property that is available  |
|      | from other agencies.                                          |
+------+---------------------------------------------------------------+
| 3\.  | [Federal Prison Industries (UNICOR)](http://www.unicor.gov/). |
|      | Federal Prison Industries is a required source only for items |
|      | above the micropurchase threshold. Cardholders who have       |
|      | purchase card authority greater than the micropurchase        |
|      | threshold and are purchasing items above the micropurchase    |
|      | threshold should see FAR Subpart 8.6 for the evaluation       |
|      | procedures.                                                   |
+------+---------------------------------------------------------------+
| 4\.  | Products that are on the procurement list maintained by the   |
|      | [Committee for Purchase from People Who Are Blind or Severely |
|      | Disabled](http://www.jwod.gov/jwod/index.html). This          |
|      | committee comprises Javits-Wagner-O'Day (JWOD) Act nonprofit  |
|      | agencies: National Industries for the Blind (NIB) and         |
|      | National Industries for the Severely Disabled (NISH). The     |
|      | Committee, along with NIB and NISH, administer the AbilityOne |
|      | (formerly JWOD) Program. Cardholders should check the         |
|      | Procurement List on the Committee's Web site to determine if  |
|      | the product is a required AbilityOne purchase. AbilityOne     |
|      | products can be purchased through contractors on GSA          |
|      | Schedules, GSA wholesale supply sources, or self-service      |
|      | retail stores. Some AbilityOne products may also be available |
|      | through the HHS Strategic Sourcing Contracts/BPAs or OPDIV    |
|      | Contracts/BPAs. The HHS Strategic Sourcing contracts/BPAs     |
|      | should be used in lieu of other sources if they offer the     |
|      | AbilityOne product.                                           |
+------+---------------------------------------------------------------+
| 5\.  | Wholesale supply sources, such as GSA stock programs. See     |
|      | [GSA Global Supply](http://www.gsa.gov/globalsupply).         |
+------+---------------------------------------------------------------+
| 6\.  | Strategic Sourcing blanket purchase agreements (BPAs). The    |
|      | Strategic Sourcing BPAs must be used to obtain products that  |
|      | are within the scope of the BPA unless they are available     |
|      | from one of the sources listed above.                         |
|      |                                                               |
|      | A number of BPAs have been awarded as part of a strategic     |
|      | sourcing initiative. These instruments (1) are designed to    |
|      | lower costs and increase efficiency for the purchase of       |
|      | certain products used throughout HHS, (2) provide discounts   |
|      | of 6%--54% over traditional contracting methods and offer     |
|      | substantial savings to HHS, and (3) have a higher order of    |
|      | priority than federal schedules. The strategic sourcing BPAs  |
|      | also have higher priority than commercial, open market        |
|      | sources. Strategic sourcing BPAs exist for the categories     |
|      | shown in the table below. The HHS strategic sourcing websites |
|      | (<http://intranet.hhs.gov/ssc/> and                           |
|      | <http://intranet.hhs.gov/hwac/>) contain detailed information |
|      | on the contractors, products available, and the ordering      |
|      | procedures.                                                   |
|      |                                                               |
|      |   ----------------------------------------------------------  |
|      |   *Categories of                                              |
|      |   Strategic Sourcing                                          |
|      |   BPAs for Products*                                          |
|      |   --------------------- ------------------------------------  |
|      |   Category              Scope                                 |
|      |                                                               |
|      |   Custodial products    Janitorial and sanitary supply        |
|      |                         products                              |
|      |                                                               |
|      |   IT peripherals        Printers, monitors, data storage,     |
|      |   hardware              routers/switches, scanners, input     |
|      |                         devices (keyboards, mice), and        |
|      |                         memory (excludes desktop and laptop   |
|      |                         computers, servers, and software)     |
|      |                                                               |
|      |   Lab supplies          Laboratory and medical supplies,      |
|      |                         instruments, equipment, and           |
|      |                         inorganic chemicals                   |
|      |                                                               |
|      |   Office equipment      Purchase and lease of copier          |
|      |                         equipment (standalone copiers or      |
|      |                         multifunctional equipment)            |
|      |                                                               |
|      |   Office furniture      Desks, modular and systems            |
|      |                         furniture, seating, tables, filing,   |
|      |                         storage, and computer workstations    |
|      |                         (Haworth, Herman Miller, Kimball,     |
|      |                         Knoll, Paoli, Steelcase, and          |
|      |                         Trendway manufacturers only)          |
|      |                                                               |
|      |   Office supplies       General office supplies, copier       |
|      |                         paper, and toner                      |
|      |   ----------------------------------------------------------  |
+------+---------------------------------------------------------------+
| 7\.  | [Federal schedules](http://www.fss.gsa.gov/)                  |
+------+---------------------------------------------------------------+
| 8\.  | HHS preferred sources. An OPDIV may have awarded an IDIQ      |
|      | contract or a BPA for products not covered by any of the      |
|      | instruments or sources in the order of priority above. Before |
|      | going to open market sources to fill the requirement, the     |
|      | cardholder should first check to see if it is available from  |
|      | an existing OPDIV contract or BPA and if the price, delivery  |
|      | time, quality, and quantity offer a fair value to HHS. These  |
|      | instruments have been negotiated in advance and usually       |
|      | provide for discounts beyond what can be obtained on the open |
|      | market. When using another vendor for a product covered under |
|      | an existing OPDIV contract or BPA, the cardholder must        |
|      | document the reasons before going to the open market to fill  |
|      | the requirement.                                              |
+------+---------------------------------------------------------------+
| 9\.  | Commercial sources (open market purchases). When purchasing   |
|      | from open market sources and the value is \$3,000 or less,    |
|      | the cardholder should consider purchasing from small          |
|      | businesses to the greatest extent possible. From \$3,001 to   |
|      | \$100,000, awards must be made to small businesses unless     |
|      | waived in writing per FAR 19.502-2.                           |
+------+---------------------------------------------------------------+

+-------+--------------------------------------------------------------+
| *     |                                                              |
| Table |                                                              |
| 3.    |                                                              |
| Req   |                                                              |
| uired |                                                              |
| So    |                                                              |
| urces |                                                              |
| for   |                                                              |
| Serv  |                                                              |
| ices* |                                                              |
+=======+==============================================================+
| **Pri | **Required Sources for Services**                            |
| ority |                                                              |
| Or    |                                                              |
| der** |                                                              |
+-------+--------------------------------------------------------------+
| 1\.   | Services that are on the procurement list maintained by the  |
|       | [Committee for Purchase from People Who Are Blind or         |
|       | Severely Disabled](http://www.jwod.gov/jwod/index.html).     |
|       | This committee comprises Javits-Wagner-O'Day (JWOD) Act      |
|       | nonprofit agencies: National Industries for the Blind (NIB)  |
|       | and National Industries for the Severely Disabled (NISH).    |
|       | The Committee, along with NIB and NISH, administer the       |
|       | AbilityOne (formerly JWOD) Program. Cardholders must check   |
|       | the Procurement List on the Committee's Web site to          |
|       | determine if the service is a required AbilityOne purchase.  |
|       | AbilityOne services can be purchased through contractors on  |
|       | GSA Schedules. Some AbilityOne services may also be          |
|       | available through the HHS Strategic Sourcing Contracts/BPAs  |
|       | or OPDIV Contracts/BPAs. The HHS Strategic Sourcing          |
|       | contracts/BPAs should be used in lieu of other sources if    |
|       | they offer the AbilityOne service.                           |
+-------+--------------------------------------------------------------+
| 2\.   | Strategic Sourcing indefinite-delivery, indefinite-quantity  |
|       | (IDIQ) contracts or blanket purchase agreements (BPAs). The  |
|       | Strategic Sourcing contracts and BPAs must be used to obtain |
|       | services within the scope of the BPA or IDIQ unless they are |
|       | available from one of the AbilityOne sources listed above.   |
|       |                                                              |
|       | A number of IDIQ contracts and BPAs have been awarded as     |
|       | part of a strategic sourcing initiative. These instruments   |
|       | (1) are designed to lower costs and increase efficiency for  |
|       | the purchase of certain products and services used           |
|       | throughout HHS, (2) provide discounts of 6%--54% over        |
|       | traditional contracting methods and offer substantial        |
|       | savings to HHS, and (3) have a higher order of priority than |
|       | federal schedules. The strategic sourcing contracts and BPAs |
|       | have higher priority than commercial, open market sources.   |
|       | Strategic sourcing contracts and BPAs exist for the          |
|       | categories shown in the table below. The HHS strategic       |
|       | sourcing websites (<http://intranet.hhs.gov/ssc/> and        |
|       | <http://intranet.hhs.gov/hwac/>) contain detailed            |
|       | information on the contractors, services available, and the  |
|       | ordering procedures.                                         |
|       |                                                              |
|       |   ---------------------------------------------------------  |
|       |   *Categories of Strategic                                   |
|       |   Sourcing Contracts and                                     |
|       |   BPAs for Services*                                         |
|       |   ------------------------ --------------------------------  |
|       |   Category                 Scope                             |
|       |                                                              |
|       |   Contract closeout        Physical and administrative       |
|       |                            closeout of expired contracts     |
|       |                            and orders                        |
|       |                                                              |
|       |   Office equipment         Maintenance of copier equipment   |
|       |                            (standalone copiers or            |
|       |                            multifunctional equipment)        |
|       |                                                              |
|       |   Events management        Professional and scientific       |
|       |                            seminars and conferences,         |
|       |                            pre-event planning,               |
|       |                            facilitation, A/V services,       |
|       |                            venue arrangements, attendee      |
|       |                            registration, attendee travel     |
|       |                            and hotel arrangements,           |
|       |                            fiduciary services, project       |
|       |                            management services, and          |
|       |                            information systems               |
|       |                            infrastructure                    |
|       |                                                              |
|       |   Temporary medical and    Temporary medical staffing        |
|       |   professional staffing    resources such as physicians,     |
|       |   (TPMS)                   nurses, and allied healthcare     |
|       |                            professionals                     |
|       |                                                              |
|       |   Temporary administrative Temporary administrative          |
|       |   and professional         staffing resources such as        |
|       |   staffing (TAPS)          secretaries, computer             |
|       |                            programmers, paralegals, and      |
|       |                            technical writers                 |
|       |                                                              |
|       |   Domestic Mail Delivery   Ground and Express mail delivery  |
|       |   Services                 services (domestic only)          |
|       |   ---------------------------------------------------------  |
+-------+--------------------------------------------------------------+
| 3\.   | [Federal schedules](http://www.fss.gsa.gov/)                 |
+-------+--------------------------------------------------------------+
| 4\.   | HHS preferred sources. An OPDIV may have awarded an IDIQ     |
|       | contract or a BPA for services not covered by any of the     |
|       | instruments or sources in the order of priority above.       |
|       | Before going to open market sources to fill the requirement, |
|       | the cardholder should first check to see if it is available  |
|       | from an existing OPDIV contract or BPA and if the price,     |
|       | performance time, and quality offer a fair value to HHS.     |
|       | These instruments have been negotiated in advance and        |
|       | usually provide for discounts beyond what can be obtained on |
|       | the open market. When using another vendor for a service     |
|       | covered under an existing OPDIV contract or BPA, the         |
|       | cardholder must document the reasons before going to the     |
|       | open market to fill the requirement.                         |
+-------+--------------------------------------------------------------+
| 5\.   | Commercial sources (open market purchases). When purchasing  |
|       | from open market sources and the value is \$3,000 or less,   |
|       | the cardholder should consider purchasing from small         |
|       | businesses to the greatest extent possible. From \$3,001 to  |
|       | \$100,000, awards must be made to small businesses unless    |
|       | waived in writing per FAR 19.502-2.                          |
+-------+--------------------------------------------------------------+

#### Conduct Market Research

> When purchasing products or services from commercial sources on the
> open market, cardholders should gain some knowledge about the
> merchants that typically provide the products or services the
> cardholder wishes to obtain. Do they offer reasonable prices? Do they
> offer quality products? Do they provide good customer service? This
> market research will help ensure that the Government gets the best
> value from the merchant selected. Getting the best value for the
> Government means the cardholder should consider price, delivery,
> service, reliability, quality, and any other factors that are
> important. Based on their knowledge of the merchant(s), the cardholder
> should select a merchant that provides the best combination of factors
> for the requirement.
>
> Cardholders are not required to obtain quotes from more than one
> merchant, but may compare value among merchants, if time permits. That
> is, the merchant with the lowest price does not have to be selected if
> another merchant offers a better value. Cardholders that have obtained
> prices from more than one merchant and decide to make a best-value
> purchase from a merchant that does not have the lowest price should
> document the decision, indicating the merchants and prices, and
> include a brief statement of the rationale for the decision in the
> purchase card file.
>
> When purchasing from the open market or from contracts or BPAs
> (including HHS Strategic Sourcing contracts and BPAs) that have
> multiple merchants for the same product or service, cardholders that
> have repetitive requirements for the same or similar products and
> services should rotate purchases among qualified merchants to avoid
> showing favoritism to a particular merchant.

#### Determine if Merchant Accepts Card

> Once the cardholder has selected a merchant, he or she should verify
> that the merchant accepts the purchase card. (Because the merchant may
> not be familiar with the term "purchase card," simply ask if it
> accepts VISA cards.) If the merchant does not accept the purchase
> card, the cardholder has three options: (1) find another merchant that
> does accept the card; (2) pay the merchant using a convenience check,
> if authorized by the OPDIV (see [III.D](#convenience-checks)); or (3)
> have the requirement purchased by the contracting office.
>
> **[Third-Party Credit Card Processors]{.underline}**
>
> Some merchants, usually small businesses doing business over the web,
> may not have their own merchant account to accept credit cards.
> Instead, the merchant may use a third-party credit card processor to
> handle credit card transactions on behalf of the merchant.
> Technically, when paying a merchant through a third-party processor,
> the buyer is actually completing the transaction with the processor,
> not the merchant. The name of the processor will appear on the monthly
> statement of account instead of the merchant.
>
> HHS policy prohibits using the Government purchase card to pay
> merchants through a third-party processor because of the greater risk
> of abuse, issues involving disputed transactions, and difficulty
> identifying and reconciling transactions. There are two exceptions to
> this prohibition:

-   *No other merchants can supply the product or service or meet
    delivery, quantity, or quality requirements, and the merchant in
    question will accept payment only through the third-party
    processor.* In this case, the cardholder may use the card to
    purchase the product or service but must document the purchase card
    file with the name of the merchant, the name of the third-party
    processor, the amount of the transaction, and a brief statement
    explaining why it was necessary to purchase the product or service
    from that merchant.

```{=html}
<!-- -->
```
-   *The cardholder used the card to purchase from a merchant but was
    unaware that the merchant was using a third-party credit card
    processor.* In this case, the cardholder may not know that a
    third-party processor was used until he or she receives the bank
    statement. It may be difficult to reconcile the purchases because
    the transaction may appear under the name of the third-party
    processor instead of the merchant name. Before contacting the bank
    to dispute a transaction that, on the surface, may appear to be
    invalid, the cardholder should attempt to match the purchase amount
    on the bank statement with the purchase log and records, contacting
    the merchant if necessary to confirm whether it uses a third-party
    processor.

> The cardholder should document the purchase card file and send an
> informational e-mail to the A/OPC indicating the names of the merchant
> and third-party processor. A/OPCs must keep a list of merchants using
> third-party processors and periodically advise their cardholders to
> avoid these merchants if possible. The following are some common
> third-party processors:

-   2Checkout

-   CCBill

-   CCNow

-   DigiBuy

-   iBill

-   Kagi

-   Multicards

-   PayPal

-   ProPay

-   SpeedPay

-   RegNow

> There may be other third-party processors besides those listed here.
>
> Cardholder accounts with transactions involving third-party credit
> card processors may be subjected to increased oversight and auditing.

#### Determine if Tax is Added by Merchant

> All U.S. Government purchases using the purchase card are tax exempt.
> The cardholder should advise merchants of the tax exemption before
> completing a purchase transaction. After completing a purchase
> transaction, the cardholder should also check the sales receipt or
> invoice to verify that sales tax was not added to the purchase price.
> If tax was added, the cardholder should ask the merchant to remove the
> tax and, if requested to provide documentation or a tax exempt number,
> should provide the merchant with the OPDIV's employer identification
> number (EIN) or a copy of the state's [tax exempt
> letter](http://apps.fss.gsa.gov/services/gsa-smartpay/taxletter/index.cfm).
> Copies of state tax letters are found at the GSA Web site
> <http://apps.fss.gsa.gov/services/gsa-smartpay/taxletter/>. Because
> state tax laws vary, there may be instances where merchants will not
> agree to deduct taxes from the purchase price. If the merchant refuses
> to remove the tax, and the cardholder and AO are unable to resolve the
> matter, the cardholder should attempt to locate another merchant that
> does not add tax to the purchase price. If no other merchant is
> available, the cardholder may make the purchase from the original
> merchant, and document the file that an attempt was made to have the
> tax removed. The HHS OPDIV's EINs are as follows:
>
> AHRQ---52-0821668B1\
> CDC---58-6051157\
> CMS---52-0883104\
> FDA---53-0196965\
> HRSA---52-0821668\
> IHS---Cardholder should contact their Area Finance Office\
> NIH---52-0858115\
> PSC---53-0196960\
> SAMHSA---52-0821668A8

#### Determine if Merchant Added Surcharge for Using Card

> The cardholder should check to ensure that the merchant does not add a
> separate fee or premium for using the purchase card. Fees or premiums
> are not permitted by VISA. This includes instances in which a merchant
> may pay a fee to another merchant to process the transaction in the
> VISA system. The cardholder should contact the A/OPC if the merchant
> insists on adding a fee.
>
> Merchants are also prohibited from requiring a minimum or maximum
> transaction amount as a condition for accepting the card. Merchants
> also cannot require cardholders to complete a postcard or similar
> document that includes the account number, card expiration date,
> signature, or other account data that would appear in plain view when
> mailed. Cardholders that encounter these situations should ask the
> merchant to delete that requirement and should contact the A/OPC if
> the merchant refuses.

#### Ensure Merchant Bills Only Upon Shipment

> When purchasing products, the cardholder should ensure that the
> merchant charges the purchase card account only upon shipment of the
> items. This is required by VISA regulations, so merchants should not
> be billing in advance of shipment. Cardholders must not place orders
> for products that have to be backordered,[^3] but they may order
> products that are currently available in the merchant's warehouse and
> will be delivered within the next billing cycle. In such cases, the
> cardholder should confirm that the merchant will bill the account only
> upon shipment of the item. Exceptions to the no backorder policy are
> subscriptions (including scientific reprints), which are paid for and
> then delivered in subsequent periods, and public service announcements
> and print media ads, which require up-front payments. Cardholders
> should maintain complete records of purchases, because items with
> delayed billing and delivery can complicate the monthly reconciliation
> process.
>
> When the cardholder is purchasing services, VISA regulations allow the
> merchant to bill upon initiating some action related to the service
> being performed. The merchant is not required to wait until the
> service is completed or accepted by the Government in order to process
> the transaction.

#### Price Reasonableness

> When using the purchase card for purchases at or below the
> micropurchase threshold, cardholders are permitted to contact a single
> merchant and make an award to that merchant, without obtaining
> competitive prices from other merchants, provided they believe the
> price to be reasonable. However, the cardholder must verify and
> document price reasonableness in two instances. The first instance is
> when the cardholder suspects, or has information to indicate, that the
> price may not be reasonable. In this case, the cardholder may attempt
> to negotiate a lower price with the merchant or contact other
> merchants to obtain additional prices. The second instance is when the
> cardholder is purchasing a product or service for which there is no
> comparable pricing information available, such as records of previous
> purchases for the same or similar products or service. In both
> instances, the cardholder must include, with the purchase
> documentation, an explanation of how price reasonableness was
> determined.
>
> Cardholders who are authorized to use the purchase card above the
> micropurchase threshold must follow the policies in FAR Part 13,
> Simplified Acquisition Procedures, for determining price
> reasonableness.

#### Purchase from Merchant

> When ready to complete a purchase, the cardholder should ask the
> merchant if there are any discounts for U.S. Government purchases.
> Some merchants may apply this discount automatically at the point of
> sale. The cardholder should also determine if there are any additional
> charges for shipping, establish the delivery time, and inquire about
> the merchant's return policies should there be a problem with the
> item. Before completing the transaction, the cardholder should check
> the sales amount to make sure it agrees with the price quoted.
>
> If making an over-the-counter purchase, the cardholder must take the
> product from the merchant at the point of sale, obtain a customer copy
> of the sales receipt, and make sure any extra copies of the sales
> receipt are destroyed. The sales receipt must be retained in the
> monthly purchase card documentation file.
>
> If making a telephone order, the cardholder must make sure that the
> product or service can be adequately described over the phone so that
> the merchant has a clear understanding of what is required. Orders for
> complex products or services that require lengthy descriptions should
> be documented in writing as opposed to purchased over the phone. When
> ordering over the phone, the cardholder will need to provide the
> merchant with the account number, expiration date, and if requested,
> the billing address. Some merchants may request the security code
> found on the back of the card for additional verification. Do not fax
> or otherwise provide a copy of the card to the merchant. This is a
> card security risk and is against VISA regulations.
>
> If the product will be shipped, the cardholder will need to provide a
> shipping address and should ask the merchant to include the following
> on the packing slip:

-   Cardholder's name and office

-   Complete delivery address, including mail stop if required

-   Cardholder's telephone number

-   The term "credit card."

> The merchant must *not* include the card number on the shipping label
> or packing slip.
>
> If the product will be picked up from the merchant by someone other
> than the cardholder, and the merchant requires that a receipt be
> signed, the person picking the product up should sign the receipt as
> "Received by \_\_\_\_\_." The cardholder should retain this receipt in
> the monthly documentation.

#### Denied Transactions

> If the transaction is denied during the card authorization process,
> the cardholder should do the following:

-   Determine whether the transaction amount exceeds either the single
    purchase limit or the monthly limit. If either limit is exceeded,
    the transaction will be denied.

-   Check the card expiration date to determine if the card is still
    valid.

-   For telephone or other purchases that do not use electronic card
    readers, ask the merchant to verify that it has recorded the account
    number and expiration date correctly.

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-   Contact the servicing bank using the toll-free number on the card
    and try to determine why the transaction was declined.

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-   Contact the A/OPC to determine the reason the transaction was
    declined. The merchant category code may have been blocked by
    default as an ineligible business type for use with the card under
    the SmartPay program. Some merchants may have an incorrect merchant
    category code assigned to their business, which may have been
    blocked by the servicing bank. If the merchant has a blocked code,
    but upon review is determined to be a valid business for use with
    the card, the A/OPC can contact the servicing bank and temporarily
    have the restriction lifted. A/OPCs should request that merchants
    correct any merchant code errors to avoid future declined
    transactions.

#### Arrange for Delivery

> If the product is to be shipped to a location that is outside of the
> cardholder's office, the cardholder must arrange for an individual in
> the receiving office to confirm receipt of the product by signing and
> dating the shipping document, packing slip, or other receiving
> document. The receiving official must forward the document to the
> cardholder, who should then retain the document in the purchase card
> file.
>
> If the product is shipped directly to the cardholder's office, the
> cardholder must sign and date the shipping document, packing slip, or
> other receiving document and retain it in the purchase card file.
>
> Individuals receiving products are responsible for complying with all
> HHS and OPDIV requirements for recording reportable and sensitive
> property. See [III.E.](#property-accountability) for additional
> information.

#### Register Purchase Information in Log

> After making a purchase using the card, the cardholder must register
> the purchase in the purchase card log (electronic or paper depending
> upon the OPDIV). At a minimum, the log must include the date
> purchased, a description of the product or service, the merchant name
> and address, the amount paid, and the date received. The cardholder
> must then compare the logged purchases with the transactions reported
> by the bank (electronically or on the monthly bank statement) and
> check to see if the dollar amounts agree. If there are differences
> between the logged purchase and the bank's transaction record, the
> cardholder should contact the vendor to attempt to resolve the
> discrepancy. If it cannot be resolved with the vendor, the cardholder
> must treat the discrepancy as a disputed item and follow the
> procedures under [III.A.19](#_Any_Disputesd_with_Merchant?_Transa).

#### Maintain Monthly File for Receipts and Other Documentation

> The cardholder must maintain a monthly file of all original records
> and documents related to purchases made during the month. The
> documents include price quotes, receipts, telephone records, shipping
> documents, price justifications, and any other documents related to
> the purchases.
>
> At the end of each month, the cardholder should transfer the monthly
> file to a central filing system where all office purchase card records
> are maintained as determined by each OPDIV. In accordance with FAR
> 4.805, the cardholder's purchase card files must be retained for a
> total of 3 years after payment, following OPDIV procedures for on-site
> and off-site storage.

#### Receive Products/Services

> When the cardholder or the customer receives delivery of a product,
> the cardholder should compare the product delivered with what was
> ordered to ensure that the proper item was delivered and that is not
> damaged or defective. If the product (or service) delivered differs
> from what was ordered, the cardholder should contact the merchant to
> resolve the problem. If a merchant refuses to replace the product or
> make corrections, then the transaction will be considered to be in
> dispute.

#### Disputed Transactions

> Disputed transactions occur when the cardholder and the merchant are
> unable to resolve questioned transactions and the servicing bank must
> be involved in the resolution. Disputes typically involve erroneous
> charges or duplicate charges on the account. Before notifying the
> bank, the cardholder must first try to resolve the dispute with the
> merchant.
>
> If the merchant refuses to resolve the problem, the cardholder must
> complete a Cardholder Statement of Questioned Item (CSQI) (available
> from the AO or servicing bank) and, in order to preserve dispute
> rights, must either fax or mail the form to the servicing bank within
> 60 days from the date the questioned item appeared for billing. (The
> servicing bank will not accept CSQIs that are received after the 60
> day time frame.) The cardholder must keep a copy of the form in his or
> records, as well as provide a copy to the AO. The servicing bank will
> issue a credit for the transaction until the dispute is resolved.
>
> Examples of disputes include the following situations and their
> associated documentation required:

-   *Defective items not replaced*---CSQI describing when and how item
    was returned and proof of return.

-   *Incorrect or altered transaction amounts*---CSQI stating the
    correct amount and copy of the original receipt.

-   *Canceled transactions not credited on your account*---CSQI
    indicating the date of cancellation and a copy of supporting
    documentation.

-   *Duplicate transactions*---CSQI, identification of the correct and
    duplicate transactions, and a copy of receipt for the correct
    transaction.

-   *Products/services ordered but never received*---CSQI with expected
    date of receipt and explanation of attempts to resolve the dispute
    with the merchant (include the date and name of the person spoken
    with at the merchant).

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-   *Product returned to merchant (other than in person)*---CSQI with
    explanation of how the product was returned and a copy of proof of
    return. (Products must be returned by a verifiable means.)

-   *Canceled recurring transaction (such as a subscription)*---CSQI and
    a copy of cancellation notice sent to the merchant.

-   *Credits never received*---CSQI stating that a credit has not been
    received and a copy of the credit slip or other documentation from
    the merchant showing the credit amount.

-   *Invalid transactions*---CSQI stating that the transaction did not
    occur.

-   *Shipping one item but billing for another*---CSQI stating that the
    merchandise received was different from what was ordered, proof of
    what was ordered, a copy of the return receipt, and an explanation
    if the product was not returned.

-   *Unrecognized charge*---letter, signed by the cardholder or the
    disputes official, stating that the transaction was not recognized.
    The merchant has 30 days to respond to the servicing bank. If the
    merchant provides a copy of the receipt, the cardholder will have 20
    days to review it and notify the servicing bank if he or she still
    does not recognize the transaction.

> The cardholder cannot dispute shipping charges, tax, exchange rates,
> or convenience check purchases with the servicing bank. These items
> must be resolved directly with the merchant.
>
> For advice or assistance regarding any dispute-related issue or
> problem, the cardholder should contact the OPDIV's disputes official,
> if one has been designated, or the A/OPC.

#### Receive Monthly Bank Statement

> Cardholder purchases made during the monthly billing cycle will be
> reflected on the bank's monthly statement. Depending on the OPDIV's
> card system and processes, the bank statement may be in an electronic
> or hard-copy form. If received electronically, the individual card
> transactions are downloaded to the purchase card system by the bank
> throughout the billing cycle. The cardholder should review the
> transactions individually and reconcile them as they occur. If the
> servicing bank provides a hard-copy statement, it will mail the
> statement after the close of the billing cycle. The statement will
> contain all of the card transactions made by the cardholder during the
> billing cycle.

#### Reconcile Monthly Purchases with Bank Statement

> The cardholder must review the bank statement to ensure that all of
> the cardholder's actual purchases and transactions are matched to the
> corresponding transactions on the purchase log and, if applicable to
> the OPDIV, registered in the electronic purchase card system. If the
> OPDIV does not use an electronic purchase card system, follow OPDIV
> guidance for reconciling the transactions.

#### Review for Unauthorized Charges

> The cardholder should review his or her account regularly for any
> unauthorized charges. An unauthorized or unrecognized charge could be
> the result of a clerical error by a merchant, or it could be an
> indicator that the account number has been compromised. If the
> cardholder suspects an error, then he or she should follow the dispute
> procedures in [III.A.19](#_Any_Disputesd_with_Merchant?_Transa). If
> the account has been compromised, the cardholder should immediately
> notify the servicing bank, AO, and A/OPC.

#### Untimely Billing by Merchant

> The cardholder shall continually review the account to ensure that
> merchants are billing promptly for products or services ordered.
> Although VISA regulations allow merchants to invoice up to 1 year from
> the date of purchase, the cardholder should monitor merchant billing
> practices and encourage merchants to bill upon shipment, rather than
> delaying or batching their VISA transactions. Otherwise, billing could
> occur weeks or months in the future, making it difficult to reconcile
> the amount with the original purchase. The cardholder shall contact
> the merchant and attempt to resolve all instances of untimely billing.
>
> If an unbilled transaction exists in the account, yet the merchant
> reports that it has been paid, then the merchant may have mistakenly
> billed another VISA account. If the merchant is unable to determine
> the source of the error, the cardholder shall document that fact and
> retain the documentation with the other monthly purchase card records.

#### Submit Monthly Purchase and Supporting Information to AO for Approval

> At the end of the billing cycle, the cardholder must sign the
> statement of account (either a printout from the card management
> system or the servicing bank's hard-copy statement, depending on the
> OPDIV) detailing the monthly transactions, attach the original
> receipts from the monthly purchase card file, and submit it to the AO
> for review and signature.
>
> If the AO questions the legitimacy of any purchase and the cardholder
> is unable to justify the purchase, the cardholder will either have to
> provide restitution to the Government, or return the unauthorized
> products to the merchant and obtain a credit to the account. The
> cardholder will also be subject to disciplinary actions for card
> misuse and/or criminal penalties for fraudulent actions.

## Use of the Purchase Card above the Micropurchase Threshold

> Cardholders who have received advanced training in accordance with
> [II.B.1](#purchase-card-training), and have been delegated authority
> to use the purchase card above the micropurchase level, are considered
> to be part of the acquisition workforce. Those cardholders are
> required to follow the policies and procedures in FAR Part 13 and
> HHSAR Part 313, Simplified Acquisition, with respect to any purchase
> that exceeds the micropurchase threshold. The cardholder must adhere
> to the requirements for competition, public notice, small business
> set-asides, and use of appropriate provisions and clauses. Other
> administrative procedures specific to the card program---for example,
> logging and reconciling transactions, and disputing
> transactions---will still apply.

## Approving Official Process

> AOs are responsible for performing the following duties:

-   Requesting that new cardholder accounts be established and
    recommending the cardholder's single purchase and monthly purchase
    limits. AOs must document the need for all cardholder accounts in
    accordance with the procedures in this guide.

-   Reviewing and approving each transaction for all of the assigned
    cardholders. AOs must verify that all transactions were for a bona
    fide Government need and in accordance with the FAR, HHSAR, this
    guide, and any OPDIV-specific procedures. AOs are responsible for
    reporting all suspected cases of misuse or fraud in accordance with
    [IV.D.3.](#reporting-suspected-fraud-or-misuse) of the Guide. After
    reviewing and approving the purchase transactions, the AO must sign
    the statement of account and retain it in the official purchase card
    file.

-   Viewing each cardholder's account and verifying that the correct
    accounting information has been assigned to the transactions.

-   Assisting cardholders with resolving disputed transactions.

-   Ensuring that cardholders maintain all documentation related to each
    purchase and that monthly purchase card documentation is stored in
    accordance with records retention requirements and OPDIV procedures.

-   Serving as a liaison between the cardholders and the A/OPC.

-   Monitoring cardholder practices and reporting all instances of
    misuse or suspected fraud to the A/OPC.

-   Reconciling purchase transactions against the bank statement of
    account on behalf of a cardholder when the cardholder is absent due
    to illness, extended leave, or other assignments.

## Convenience Checks

#### Convenience Check Policies

> Convenience checks may be issued by the servicing bank to individual
> cardholders or other individuals authorized to use them. Because of
> the fees and potentially higher risks associated with use of
> convenience checks, OPDIVs will determine whether convenience checks
> are authorized for use within the OPDIV. When an OPDIV authorizes use
> of convenience checks, the A/OPC is the only individual authorized to
> order/reorder convenience checks. If convenience checks are authorized
> for use within an OPDIV, they may be requested at the time a new
> cardholder (or checkwriter) is nominated per
> [II.A.3.](#nominating-prospective-aos-and-cardholders) of the Guide,
> using the Request for New Cardholder/Checkwriter template in [Appendix
> B](#appendix-b.-templates), The justification for convenience checks
> must be completed on the template. If convenience checks are
> authorized for use within an OPDIV, and the cardholder requires them
> for his or her existing account, the AO shall complete the template
> with a justification documenting the need for the checks, and send the
> request to the A/OPC. In this case, the AO should also indicate on the
> request that the individual is an existing cardholder.
>
> Convenience checks may only be used when the card is not accepted for
> payment of services or goods. Examples of such use may include
> recurring needs to make payments to:

-   Participants in medical studies/trials

-   Individuals and/or small businesses (e.g., photographers,
    consultants) that do not have merchant accounts with a card provider

-   Indian tribes or tribe affiliates, often at remote locations

-   Vendors in underdeveloped countries

-   Emergency incidents in which electronic payment capabilities are not
    available

> **Prior to initiating a purchase transaction using a convenience
> check, the account holder must obtain written pre-approval from either
> her or his supervisor, AO, A/OPC or higher authority.** Written
> pre-approval may be in the form of an e-mail, signed memo/note, etc.,
> which: (a) certifies that the proposed purchase is for a legitimate
> need of the government and not for personal benefit; and (b) documents
> the circumstances requiring use of a convenience check instead of a
> purchase card. A copy of the written pre-approval must be retained in
> the purchase card file.
>
> Checks must not be written for amounts greater than \$3,000.[^4] In
> this case, the requirement must be submitted to the contracting office
> for purchase through other methods. Also, using more than one check to
> pay for a single product or service, or splitting the requirement so
> that it falls below the micropurchase threshold, is prohibited.
>
> Checks must not be written to "Cash" or to any other Government
> employee under any circumstances.
>
> The only person authorized to sign a convenience check is the
> individual to whom it was issued. This signature requirement may not
> be delegated or transferred to another person. Checkwriters must not
> pre-sign checks.
>
> Checks must be written in U.S. dollars only.
>
> Purchases made with convenience checks are tax exempt.
>
> When using a convenience check, the checkwriter must record the
> vendor's name, address, telephone number, a brief description of the
> purchase, check number, check amount, and check fee on the convenience
> check register. In addition, when writing a check to an individual,
> sole proprietor, partnership, or corporation in payment for services,
> the checkwriter must collect the Taxpayer Identification Number (TIN),
> which can be the EIN or social security number. This information is
> required by the finance office to prepare the IRS-required 1099-MISC
> forms.
>
> Copies of canceled checks are available from the servicing bank for 3
> years.
>
> The bank supplies checks in quantities of 150, which include duplicate
> paper and a convenience check register. It is HHS policy that only the
> A/OPC is permitted to request check orders and reorders from the
> servicing bank. Checks are mailed by the bank (or check printer)
> directly to checkwriters.
>
> The checkwriter must adhere to his or her single purchase and monthly
> purchase limits when using convenience checks and ensure that there is
> sufficient funding remaining in the account to cover the amount of the
> check. If limits are exceeded, the check may be returned unpaid. A fee
> will be charged to the checkwriter's account for any returned checks.
> This practice must be avoided because of the resulting increased
> administrative costs for returned checks and vendor payment, as well
> as the negative impact on vendor relations.
>
> Delays by a merchant in cashing a check or in the check-clearing
> process could result in monthly purchase limits being exceeded,
> because the check transaction may be recorded against the monthly
> limit in the next billing cycle. The checkwriter should keep track of
> their outstanding checks and be aware that the transaction could be
> unexpectedly applied against the current monthly limit. If the monthly
> limit is exceeded, the bank will return the check to the merchant
> unpaid. To reduce this risk, the checkwriter should advise the
> merchant to cash the check promptly. Checkwriters should also use
> their check register to keep track of all outstanding checks.
>
> The bank disputes procedure does not apply to convenience checks. Any
> disputes involving convenience checks must be resolved directly with
> the merchant.
>
> Convenience checks must be kept in a secure location (such as a locked
> safe) and protected against theft, loss, and forgery. The checkwriter
> will be held personally responsible for any loss incurred as a result
> of his or her failure to safeguard the checks. Convenience check
> transactions occur outside of the card system and do not require bank
> approval prior to use. Existing controls that restrict purchases to
> certain merchant category codes or prevent single and monthly purchase
> limits from being exceeded are not enforced at the point of sale, and
> may not always be enforced by the bank during the check clearing
> process. As a result, extra diligence is required to ensure that
> convenience checks are not misused or used fraudulently.
>
> A "stop payment" order may be issued on a convenience check by
> contacting the servicing bank before the check is posted to the
> account. A fee will be assessed to the checkwriter's account for a
> stop payment order.
>
> If a checkwriter's account is cancelled for any reason, the
> checkwriter (or AO if the checkwriter is unavailable) must shred all
> unused checks.

#### Checkwriter Responsibilities

> When using convenience checks, checkwriters have the following
> responsibilities:

-   Follow purchase card procedures for purchasing products or services,
    including use of required sources.

-   Obtain a price quote and receipt (describing the purchased products
    or services) from the merchant, and pick up (or obtain delivery) of
    the purchased products or services promptly in order to avoid an
    advance payment situation. Attach purchase documentation to the
    duplicate copy of the convenience check and retain in the monthly
    purchase file.

-   Obtain the merchant's name, address, and phone number, and enter the
    information in the convenience check register along with a brief
    description of the purchase, the check number, amount of purchase,
    and check fee. If writing a check to an individual, sole proprietor,
    partnership, or corporation for payment of services, the checkwriter
    must also collect the TIN, which can be the EIN or social security
    number.

-   Record and log the purchase transaction.

-   Review the transactions against the bank statement, and identify any
    errors in the dollar amounts. Keep track of outstanding checks that
    may appear as transactions on future billing statements. Check fees
    may be listed apart from the checks on the bank statement.

-   Store the convenience checks in a secure, locked location, such as a
    safe.

-   Maintain records related to convenience check transactions and store
    them in accordance with records retention requirements and OPDIV
    procedures.

-   Immediately notify the A/OPC and AO if fraud related to the use of a
    convenience check is suspected.

-   Shred all unused checks if they are no longer needed, or when the
    account has been cancelled.

## Property Accountability

> Accountable property is all Government property acquired at a cost of
> \$5,000 or more. Sensitive items are those that are considered highly
> desirable and could easily be converted to personal use, or are
> subject to unusual rates of loss, theft, or misuse. Some items,
> regardless of cost, are considered sensitive items. OPDIVs may
> identify products that are considered sensitive. The purchase card may
> be used to obtain accountable or sensitive property (if within card
> purchase limits and if authorized for purchase using the card).
> Cardholders and other personnel who purchase and/or receive
> accountable or sensitive property must follow all HHS and OPDIV
> policies and procedures with respect to pre-purchase approvals,
> clearances, and recording such property upon receipt.

## Purchase Card Use during Emergencies

#### Background

> This section is designed to give guidance to cardholders for using the
> purchase card during emergencies. Emergencies may be national,
> regional, or local in scope. Events that trigger emergencies may
> include natural disasters such as hurricanes, earthquakes, floods,
> volcanic activity, tsunamis, etc. Emergencies may be triggered by
> disease outbreaks, epidemics and contamination of water or food
> supplies. Emergencies may also be triggered by acts of war or
> terrorism, including nuclear, biological, chemical, or radiological
> attacks, explosions, or cyber attacks. Finally, a local emergency may
> result from local weather events, fires, utility interruptions,
> accidents, localized illnesses, criminal activity, etc.
>
> Table 4 below describes in greater detail the emergency authorities
> that address the emergency situations described above. Additional
> information on contracting during emergencies is available from the
> HHS Contingency Contracting website at <http://www.hhs.gov/oamp/cc/>.

+-------------+-------------+-------------+--------------------------+
| ***Table 4. |             |             |                          |
| Summary of  |             |             |                          |
| Emergency   |             |             |                          |
| Co          |             |             |                          |
| nditions*** |             |             |                          |
+=============+=============+=============+==========================+
| **Emergency | **          | **Initiated | **Effect on              |
| Situation** | Authority** | By**        | Cardholders**            |
+-------------+-------------+-------------+--------------------------+
| **Disease,  | **Public    | **De        | **Existing rules for     |
| epidemic,   | Health      | termination | purchase card and        |
| co          | Emergency   | by the      | convenience checks       |
| ntamination | under 42    | Secretary   | apply. No increases to   |
| or other    | U.S.C.      | of HHS**    | micropurchase threshold  |
| disorder    | 247d**      |             | unless additional        |
| resulting   |             |             | legislation, Executive   |
| in a public |             |             | Order, etc. is issued    |
| health      |             |             | that raises the          |
| emergency** |             |             | threshold. Cardholders   |
|             |             |             | may use their cards to   |
|             |             |             | support the public       |
|             |             |             | health emergency in      |
|             |             |             | accordance with their    |
|             |             |             | normal authority.        |
|             |             |             | Cardholders with         |
|             |             |             | designated emergency     |
|             |             |             | cards** **(see           |
|             |             |             | [II                      |
|             |             |             | .A.2.](#_Selection_and_A |
|             |             |             | ppointment_of_A%2FOPCs)) |
|             |             |             | may use them for         |
|             |             |             | purchases in support of  |
|             |             |             | the public health        |
|             |             |             | emergency, up to the     |
|             |             |             | limits of their          |
|             |             |             | emergency card authority |
|             |             |             | as designated on their   |
|             |             |             | DPA or SF-1402.**        |
+-------------+-------------+-------------+--------------------------+
| **Defense   | **Special   | **De        | **Existing rules for     |
| against, or | Emergency   | termination | purchase card and        |
| recovery    | Procurement | by the head | convenience checks       |
| from, acts  | Authority   | of an       | apply. Cardholders may   |
| of war or   | under 41    | executive   | use their cards to       |
| terrorism,  | U.S.C.      | agency**    | support the emergency in |
| such as a   | 428a. See   |             | accordance with their    |
| nuclear,    | FAR         |             | normal authority (see    |
| biological, | 13.201(g)** |             | next paragraph for       |
| chemical,   |             |             | higher limits).          |
| or          |             |             | Cardholders with         |
| r           |             |             | designated emergency     |
| adiological |             |             | cards (see               |
| attack**    |             |             | [II                      |
|             |             |             | .A.2.](#_Selection_and_A |
|             |             |             | ppointment_of_A%2FOPCs)) |
|             |             |             | may use them for         |
|             |             |             | purchases in support of  |
|             |             |             | the emergency up to the  |
|             |             |             | limits of their          |
|             |             |             | emergency card authority |
|             |             |             | (see next paragraph for  |
|             |             |             | higher limits).**        |
|             |             |             |                          |
|             |             |             | **In this emergency, the |
|             |             |             | micropurchase single     |
|             |             |             | purchase limit is        |
|             |             |             | increased to \$15,000    |
|             |             |             | for purchases conducted  |
|             |             |             | inside the U.S. and      |
|             |             |             | \$25,000 for purchases   |
|             |             |             | conducted outside the    |
|             |             |             | U.S. Cardholders do not  |
|             |             |             | automatically get a      |
|             |             |             | higher single purchase   |
|             |             |             | limit. Cardholders will  |
|             |             |             | either be selected by    |
|             |             |             | OPDIV management to      |
|             |             |             | receive a higher limit,  |
|             |             |             | or the AO or supervisor  |
|             |             |             | must request a higher    |
|             |             |             | limit for a cardholder.  |
|             |             |             | The higher limits can    |
|             |             |             | only be used for         |
|             |             |             | purchases directly       |
|             |             |             | related to the nuclear,  |
|             |             |             | biological, chemical, or |
|             |             |             | radiological attack. See |
|             |             |             | also                     |
|             |             |             | [III.A.5.](#             |
|             |             |             | determine-if-purchase-is |
|             |             |             | -within-dollar-limits)** |
+-------------+-------------+-------------+--------------------------+
| **Major     | **Robert T. | **          | **Existing rules for     |
| natural     | Stafford    | Declaration | purchase card and        |
| disasters   | Disaster    | of an       | convenience checks       |
| in which    | Relief and  | emergency   | apply. No increases to   |
| emergency   | Emergency   | or major    | micropurchase threshold  |
| assistance  | Assistance  | disaster by | unless additional        |
| is provided | Act under   | the         | legislation, Executive   |
| to states,  | 42 U.S.C.   | President** | Order, etc. is issued    |
| local       | 5121 et.    |             | that raises the          |
| g           | seq.**      |             | threshold. Cardholders   |
| overnments, |             |             | may use their cards to   |
| tribal      |             |             | support the emergency    |
| nations,    |             |             | relief or disaster       |
| i           |             |             | recovery in accordance   |
| ndividuals, |             |             | with their normal        |
| and         |             |             | authority. Cardholders   |
| qualified   |             |             | with designated          |
| nonprofit   |             |             | emergency cards (see     |
| orga        |             |             | [II                      |
| nizations** |             |             | .A.2.](#_Selection_and_A |
|             |             |             | ppointment_of_A%2FOPCs)) |
|             |             |             | may use them for         |
|             |             |             | purchases in support of  |
|             |             |             | the disaster relief or   |
|             |             |             | emergency assistance up  |
|             |             |             | to the limits of their   |
|             |             |             | emergency card authority |
|             |             |             | as designated on their   |
|             |             |             | DPA or SF-1402.**        |
+-------------+-------------+-------------+--------------------------+
| **Recovery  | **Local     | **De        | **Existing rules for     |
| from local  | emergencies | termination | purchase card and        |
| em          | covered     | by HHS      | convenience checks       |
| ergencies** | under a     | officials   | apply. No increases to   |
|             | Continuity  | in          | micropurchase threshold. |
|             | of          | accordance  | Cardholders with         |
|             | Operations  | with the    | designated emergency     |
|             | Plan        | org         | cards (see               |
|             | (COOP)**    | anization's | [II                      |
|             |             | COOP**      | .A.2.](#_Selection_and_A |
|             |             |             | ppointment_of_A%2FOPCs)) |
|             |             |             | may use them for         |
|             |             |             | purchases in support of  |
|             |             |             | the local emergency up   |
|             |             |             | to the limits of their   |
|             |             |             | emergency card authority |
|             |             |             | as designated on their   |
|             |             |             | DPA or SF-1402.**        |
+-------------+-------------+-------------+--------------------------+
|             |             |             |                          |
+-------------+-------------+-------------+--------------------------+

#### Effect of Emergencies on Purchase Card Policies and Procedures

> As shown in the above table, the existence of an emergency, in and of
> itself, does not change any of the existing policies and procedures
> for using the purchase card and/or convenience checks. Therefore,
> cardholders must continue to abide by the prohibition on purchases of
> certain products or services in [Appendix
> C](#appendix-c.-prohibited-purchases), and the special requirements
> for purchasing products or services found in [Appendix
> D](#appendix-d.-purchases-requiring-special-attention).
>
> During an emergency, it is possible that special legislation or
> executive orders may be issued that temporarily waive or amend certain
> purchase card polices, such as appropriation act restrictions,
> micropurchase thresholds, or other purchase card regulations. Should
> this be the case, cardholders will be notified of any such changes by
> ASAM/OAMP or other designated HHS officials. If the micropurchase
> threshold is temporarily raised, selected cardholders may also have
> their single purchase limit and monthly limit raised. This is not an
> automatic action. Cardholders will normally be selected by OPDIV
> management to have their limits raised based on their role in support
> of the emergency. OPDIV managers shall coordinate these actions with
> the A/OPC. In other cases where a cardholder needs a higher limit to
> support an emergency requirement, the AO or other supervisory official
> must send a request to the A/OPC justifying an increase in the card
> limits. Likewise, cardholders will be advised when the emergency ends
> and their card limits revert to normal. The A/OPC will coordinate with
> the servicing bank to make any adjustments to card limits. Cardholders
> that have their card limits raised can only use the higher limits for
> purchases in direct support of an emergency. Routine purchases must
> still be made within the cardholder's normal purchase limits.
>
> An emergency may also require a temporary waiver, or imposition of,
> HHS and/or OPDIV administrative card procedures. Should this be the
> case, cardholders will be notified by ASAM/OAMP or through their
> OPDIV, as appropriate. Unless temporarily waived or modified, all
> existing purchase card procedures remain in effect. If the nature of
> the emergency prevents the cardholder from following an HHS
> administrative procedure (such as purchase pre-approval), and the
> requirement has not been formally waived or modified, then the
> cardholder should make the purchase and document the file with the
> rationale. This exception does not apply to federal statutory
> requirements, such as prohibited purchases.

#### Identifying Purchases Made in Support of Emergencies

> Experience with Hurricane Katrina indicates that after an emergency
> ends, there will likely be investigations by the Inspector General,
> GAO, and other oversight organizations into the purchasing practices
> that occurred during the event. Attempts to identify purchase card
> transactions related to an emergency after-the-fact can prove to be
> difficult. Some cardholders may have both normal transactions and
> emergency-related transactions on their accounts during the emergency
> event. In addition, cardholders deployed to an emergency location may
> not have access to HHS or bank information systems.
>
> To address the need for identifying emergency purchases, an emergency
> purchase log for cardholders/checkwriters is provided in [Appendix
> B](#appendix-b.-templates). Cardholders must complete this template,
> in hard copy, Word document, spreadsheet equivalent, electronic log,
> or other format that captures the required information, whenever a
> purchase is made in support of the first three emergencies listed in
> Table 4 above. Because local emergencies are more limited in scope,
> the log is not required to be used under those circumstances.
> Cardholders should continue to use the log until they are notified
> through official HHS channels that the emergency condition is no
> longer in effect. If doubt exists as to whether the emergency has
> begun or ended, record the purchase on the log. Purchases that fall
> outside of the official date range of the emergency can be easily
> excluded from the official tabulation after-the-fact.
>
> If cardholders have more than one card, a separate log should be
> completed for each. Cardholders should retain the logs and submit them
> to their A/OPC in accordance with HHS or OPDIV guidance.

#### Cardholder Deployment to Emergency Locations

> During an emergency, some cardholders may be deployed to the location
> of the emergency. Deployed cardholders may include officers in the
> Commissioned Corps, members of the HHS Contracting Cadre, and other
> HHS cardholders with regular or emergency cards who have volunteered
> for deployment. Cardholders deployed to an emergency location may be
> faced with one or more of the following challenges:

-   Purchases of unfamiliar products or services

-   Purchases for higher dollar amounts than normal

-   Unfamiliar location and suppliers

-   Possible separation from their AO, home office, support systems,
    e-mail, telephone, internet access, etc.

-   Possible price-gouging

-   High-stress purchasing environment

-   Possible survival or life-preserving situations

> Each of the above challenges is discussed below with suggestions for
> minimizing problems.
>
> **[Purchases of unfamiliar products or services]{.underline}**
>
> Before deploying, cardholders should attempt to learn what operations
> or functions they will be supporting, and the potential products and
> services they will be purchasing. Prior to deployment, cardholders
> should learn as much as they can about potential products and
> services, including pricing, suppliers, existing BPAs, strategic
> sourcing contracts, Federal Schedules, or other contracts already in
> place against which orders can be quickly placed.
>
> Once deployed, cardholders can seek advice about unfamiliar products
> or services by contacting their A/OPC, the HHS Emergency Hotline or
> Help Center (if established), the contracting office of their OPDIV,
> members of the HHS Contracting Cadre that are deployed in the same
> area, OPDIV legal counsel, state or local government purchasing
> officials, local businesses, local business directories, and through
> internet searches if access is available.
>
> Cardholders should check Appendices C and D of this guide to determine
> whether purchasing the product or service is prohibited or whether
> there are special requirements that must be met before making a
> purchase.
>
> **[Purchases for higher dollar amounts than normal]{.underline}**
>
> An emergency condition may result in a temporary increase in the
> micropurchase threshold. For example, during Hurricane Katrina the
> micropurchase threshold was raised to \$250,000. Some cardholders may
> be selected to have their single purchase limits increased should the
> micropurchase threshold be raised. All purchase card policies and
> procedures remain in effect even at the higher limits. However,
> cardholders should pay greater attention to pricing if single purchase
> limits are raised. If time permits, cardholders should try to obtain
> competitive pricing from several vendors, or verify that prices are
> reasonable based on price lists, catalogs, evidence of prior sales,
> etc.
>
> Cardholders who have been issued emergency cards with limits that
> exceed the micropurchase threshold must remember that they are
> required to follow FAR procedures for any purchase that exceeds the
> micropurchase threshold (unless the micropurchase threshold has also
> been raised at or above the emergency card's single purchase limit).
> When FAR procedures are required and the cardholder has questions on
> how to proceed, the cardholder should contact a member of the HHS
> Contracting Cadre, the cardholder's contracting office, the A/OPC, or
> the HHS Emergency Hotline or Help Center (if established).
>
> Deployed cardholders should also verify that there will be adequate
> funding available to support their purchases by confirming with their
> AO or OPDIV's finance office.
>
> **[Unfamiliar location and suppliers]{.underline}**
>
> Deployed cardholders may be faced with unfamiliar locations and
> suppliers. Prior to deployment, cardholders should research the
> location, using such tools as internet directories and on-line maps,
> the Thomas Register, and general web searches to gain familiarity with
> the location and suppliers. Once deployed, cardholders can request
> help from state and local government personnel, local residents, and
> local phone directories. If deployed cardholders have access to the
> internet, searches can be conducted for local suppliers. Cardholders
> can also contact their home office if communication networks are
> intact and request help from their A/OPC, OPDIV contracting office, or
> the HHS Emergency Center or Help Desk (if established).
>
> **[Separation from cardholder's AO, home office, internet, e-mail,
> communication networks, support systems, etc]{.underline}**
>
> Depending on the nature of the emergency, deployed cardholders may
> have to work in locations were communication networks are inoperative,
> or where access to the cardholder's usual resources is limited or
> nonexistent. In cases such as these, cardholders will have to work
> independently, relying on their judgment and business acumen to
> conduct business as necessary. Cardholders must still have their
> purchases reviewed and approved by their AO. If a cardholder is
> deployed and is unable to access the purchase card software and tools
> to log and review purchases, the AO must perform this function.
> Deployed cardholders must document their purchases, using paper logs
> if necessary, and send this documentation to their AO at the end of
> the billing cycle so that the account can be reconciled.
>
> **[Price gouging]{.underline}**
>
> While most businesses will continue to maintain ethical standards
> during an emergency, some vendors may use the emergency as an excuse
> to profit unreasonably through price gouging or other unethical
> business practices. Cardholders should avoid paying unreasonable
> prices, using their knowledge of the product or service, price lists,
> catalogs, manufacturer's suggested retail prices, previous sales,
> competitive quotes, or assistance from their home office to help
> determine if a price is fair and reasonable.
>
> If a cardholder believes that a price may be unreasonable, but the
> product or service is needed and there are no other alternatives, the
> cardholder should make the purchase and document her or his purchase
> card file with the details. The cardholder should report all suspected
> cases of price gouging or unethical business practices to the senior
> Federal official on site or the agency official responsible for
> coordinating the deployment. In addition, the cardholder's AO and
> A/OPC should be alerted to any incidents of suspected price gouging or
> unethical business practices so that they may be investigated and
> coordinated with the servicing bank as necessary.
>
> **[High-stress purchasing environment]{.underline}**
>
> Deploying to the site of an emergency, being faced with unfamiliar
> purchases, immediate needs, and separation from familiar resources can
> result in a stressful purchasing environment. While nothing can
> eliminate this reality, stressful situations can be reduced by being
> well-prepared for the deployment. Section
> [III.F.5.](#deployment-kit-for-cardholders) below provides information
> on a purchase card deployment kit that cardholders should assemble
> before deploying.
>
> When faced with ambiguous or uncertain purchase decisions, and help
> from the resources mentioned in the paragraphs above is unavailable,
> cardholders should use their knowledge, business judgment, and common
> sense to make a purchase decision. Document the rationale for the
> decision thoroughly so that the information is available should the
> purchase be reviewed or called into question after-the-fact.
>
> **[Survival or life-preserving situations]{.underline}**
>
> In rare cases, a deployed cardholder may be presented with a
> purchasing decision that directly affects another person's survival.
> For example, a cardholder may be faced with the need to purchase fuel
> using a purchase card, so that a critically ill or injured person can
> be transported to a hospital. In cases such as these, even though such
> a purchase would be prohibited under normal circumstances, the
> cardholder may use the card as necessary to preserve human life. Any
> such purchases must be documented thoroughly. Further, the cardholder
> shall immediately notify his or her AO and A/OPC of any such
> purchases.

#### Deployment Kit for Cardholders

> Prior to deployment to the site of an emergency, cardholders should
> assemble a cardholder deployment kit to help them carry out their
> purchasing duties. Suggested items for the cardholder deployment kit
> are as follows:

-   Purchase card

-   Convenience checks (if cardholder is authorized to have)

-   Centrally-billed travel card (if likely that cardholder will need to
    arrange travel for others while deployed)

-   Personal credit card and/or travel card for handling personal
    expenses while deployed

-   Copy of this Guide, the cardholder Quick Reference Guide, and any
    OPDIV cardholder procedures

-   Copy of the FAR <http://www.arnet.gov/far/> and HHSAR
    <http://www.hhs.gov/oamp/dap/procurpol.html> if the cardholder has
    authority to make purchases above the micropurchase threshold

-   Points of contact, including the AO, OPDIV A/OPC, ASAM/OAMP, OPDIV
    contracting office, HHS Emergency Hotline or Help Desk (if
    established), OPDIV legal counsel, OPDIV finance office, and the
    servicing bank's customer support number

-   Materials from HHS' Contingency Contracting website
    (<http://www.hhs.gov/oamp/cc/>) such as toolkit documents

-   Copies of any memos, e-mails, or other correspondence that concern
    emergency declarations, revised thresholds, changes to purchase card
    policies and procedures, etc.

-   Copy of the cardholder's delegation of procurement authority or
    SF-1402

-   Based on expected purchases, information on existing BPAs, Strategic
    Sources, indefinite delivery contracts, Federal Schedules, and other
    ordering arrangements that allow for products and services to be
    quickly ordered

-   Copies of state tax exempt letters for the deployed locations

-   Maps of deployment location to assist with locating businesses

-   Copies of HHS Emergency Purchase Log for Cardholders used to
    identify all purchases made in support of the emergency

-   Copies of paper purchase card logs to be used in case cardholder
    does not have electronic access to his or her account

-   File folders for storing and organizing purchase card documents,
    receipts, and records for the purchase card billing cycle.

#### Cardholder Support of Emergencies from their Normal Duty Locations

> HHS cardholders that do not deploy to the site of an emergency may
> still be called on to support purchases related to the emergency from
> their normal duty locations. Cardholders in this situation may face
> the following challenges:

-   Purchases of unfamiliar products or services

-   Purchases for higher dollar amounts than normal

-   Unfamiliar suppliers

-   Possible mix of regular purchases and emergency support purchases

-   Possible price-gouging

-   Delivery of products or services to remote locations

> Each of the above challenges is discussed below with suggestions for
> minimizing problems.
>
> **[Purchases of unfamiliar products or services]{.underline}**
>
> Cardholders will likely find that they need to purchase unfamiliar
> products or services in support of the emergency. Cardholders should
> use the resources at their disposal to help learn about unfamiliar
> products or services. These resources include the OPDIV A/OPC, OPDIV
> contracting office, the internet, and HHS Emergency Hotline or Help
> Desk (if established).
>
> Cardholders should determine if there are existing BPAs, contracts,
> Strategic Sources, Federal Schedules, or other ordering arrangements
> already in place that allow them to quickly and easily use the card to
> place orders for the needed product or service.
>
> **[Purchases for higher dollar amounts than normal]{.underline}**
>
> An emergency condition may result in a temporary increase in the
> micropurchase threshold. For example, during Hurricane Katrina the
> micropurchase threshold was raised to \$250,000. Some cardholders may
> be selected to have their single purchase limits increased should the
> micropurchase threshold be raised. All purchase card policies and
> procedures remain in effect even at the higher limits. However,
> cardholders should pay greater attention to pricing if single purchase
> limits are raised. If time permits, cardholders should try to obtain
> competitive pricing from several vendors, or verify that prices are
> reasonable based on price lists, catalogs, evidence of prior sales,
> etc.
>
> Cardholders who have been issued emergency cards with limits that
> exceed the micropurchase threshold must remember that they are
> required to follow FAR procedures for any purchase that exceeds the
> micropurchase threshold (unless the micropurchase threshold has also
> been raised at or above the emergency card's single purchase limit).
> When FAR procedures are required and the cardholder has questions on
> how to proceed, the cardholder should contact the OPDIV's contracting
> office, the A/OPC, or the HHS Emergency Hotline or Help Center (if
> established).
>
> Cardholders that are supporting emergencies should verify with their
> AO that adequate funding exists to support the additional
> requirements.
>
> **[Unfamiliar suppliers]{.underline}**
>
> Cardholders may have to make purchases from unfamiliar suppliers.
> Cardholders should use the resources available to them, such as the
> internet, to learn about unfamiliar suppliers. The OPDIV contracting
> office may also be able to assist cardholders with locating suppliers
> for unfamiliar products and services.
>
> **[Possible mix of regular purchases and emergency support
> purchases]{.underline}**
>
> Cardholders may need to support their regular office requirements in
> addition to supporting the emergency. Cardholders should remember to
> document all emergency-related purchases using the HHS Emergency
> Purchase Log in [Appendix B](#appendix-b.-templates) (or electronic
> equivalent). Cardholders must also remember that any increase in the
> micropurchase threshold or their single purchase limit only applies to
> purchases that support the emergency. All regular purchases are still
> subject to the cardholder's limits on his or her delegation of
> procurement authority.
>
> **[Price gouging]{.underline}**
>
> While most businesses will continue to maintain ethical standards
> during an emergency, some vendors may use the emergency as an excuse
> to profit unreasonably through price gouging or other unethical
> business practices. Cardholders should avoid paying unreasonable
> prices if at all possible; using their knowledge of the product or
> service, price lists, catalogs, manufacturer's suggested retail
> prices, previous sales, competitive quotes, or internet research to
> determine if a price is fair and reasonable.
>
> If a cardholder believes that a price may be unreasonable, the
> cardholder should attempt to locate another source. If the product or
> service is needed and there are no other sources available, the
> cardholder should make the purchase and document the purchase file
> with the details. The cardholder's AO and A/OPC should be alerted to
> any incidents of suspected price gouging or unethical business
> practices so that they may be investigated and coordinated with the
> servicing bank as necessary.
>
> **[Delivery of products or services to remote locations]{.underline}**
>
> Purchases made in support of an emergency from the cardholder's normal
> duty location will usually need to be delivered to the site of the
> emergency. Cardholders must notify the individual who will receive the
> product or service to document that the product or service has been
> received by signing the receipt, packing slip, or other evidence of
> delivery, and mailing this information to the cardholder. This
> documentation must be retained in the cardholder's monthly purchase
> file.

# Oversight and Surveillance of the Purchase Card Program

## Management Controls

> The HHS purchase card program includes a variety of management
> controls designed to minimize purchase card misuse. OPDIV A/OPCs are
> responsible for ensuring that management controls under their purview
> are followed and appropriately used to reduce potential card misuse or
> abuse within their OPDIVs. Key management controls are as follows:

-   HHS/ASAM/OAMP support of the HHS purchase card program through
    establishing HHS-wide policies and procedures, and through
    publication and periodic update of this guide.

-   Mandatory annual training requirements and documentation of
    successful completion for HHS purchase card program participants.

-   Individual cardholder purchase limits, and documentation of
    cardholder limits and authorities through DPAs and SF-1402s.

-   Written and approved justifications to support new cardholder,
    checkwriter, and AO appointments.

-   Separation of duties such that a participant in the HHS purchase
    card program is not permitted to serve in two or more roles for the
    same transaction, such as performing the duties of both a cardholder
    and AO, or having the cardholder certify funds availability for
    purchases to be made with his/her card.

-   Requiring written pre-approval for all purchase card and convenience
    check purchases.

-   Identifying prohibited purchases and purchases requiring special
    attention.

-   Use of merchant category codes to restrict card use to appropriate
    merchants.

-   Limiting convenience checks to \$3,000 and requiring A/OPC approval
    before convenience checks are ordered.

-   Requiring cardholders to document their transactions and maintain
    purchase card records.

-   Requiring that certain products be documented in the HHS property
    management system upon delivery in accordance with Federal and HHS
    property management policy.

-   Requiring A/OPCs to review purchase card data and reports from the
    bank to identify and investigate potential cases of fraud, waste,
    abuse, or misuse.

-   Requiring all AO accounts and their associated cardholder accounts
    be reviewed at least annually, and documenting/reporting cases of
    suspected fraud, waste, abuse, or misuse of the card.

-   Requiring inactive purchase cards to be reviewed for necessity on a
    semi-annual basis, and documenting the results of the reviews.

## Risk Management

> A/OPCs are responsible for taking actions to reduce the risk of card
> fraud, waste, abuse, and misuse. OPDIV A/OPCs can minimize risk by
> ensuring that Government and HHS purchase card policies and procedures
> are followed, and that program effectiveness is monitored on a regular
> basis. Table 5 below identifies typical purchase card factors that may
> result in elevated risk, along with recommended risk reductions
> methods. This list may not cover all risks associated with the
> purchase card program. A/OPCs should regularly assess their card
> program to identify additional areas of risk and develop adequate risk
> reduction methods.

+-----------------------+-----------------------+-----------------------+
| ***Table 5. Purchase  |                       |                       |
| Card Risk Factors***  |                       |                       |
+=======================+=======================+=======================+
| **Risk Factor**       | **Description**       | **Recommended Risk\   |
|                       |                       | Reduction Methods**   |
+-----------------------+-----------------------+-----------------------+
| **General risk of     | **Ensure that the     | -   **Conduct regular |
| fraud, waste, abuse   | environment is not    |     surveillance and  |
| and misuse**          | conducive to purchase |     annual reviews of |
|                       | card fraud, waste,    |     all AOs and       |
|                       | abuse, and misuse.**  |     cardholders.**    |
|                       |                       |                       |
|                       |                       | -   **Ensure that all |
|                       |                       |     violations are    |
|                       |                       |     promptly          |
|                       |                       |     identified and    |
|                       |                       |     that corrective   |
|                       |                       |     and/or            |
|                       |                       |     disciplinary      |
|                       |                       |     actions are       |
|                       |                       |     taken.**          |
|                       |                       |                       |
|                       |                       | -   **Publicize       |
|                       |                       |     serious           |
|                       |                       |     violations and    |
|                       |                       |     the actions taken |
|                       |                       |     in response.**    |
|                       |                       |                       |
|                       |                       | -   **Ensure that     |
|                       |                       |     separation of     |
|                       |                       |     duties exist so   |
|                       |                       |     that an           |
|                       |                       |     individual is not |
|                       |                       |     performing two or |
|                       |                       |     more purchase     |
|                       |                       |     card functions    |
|                       |                       |     for a transaction |
|                       |                       |     (cardholder and   |
|                       |                       |     AO, AO and        |
|                       |                       |     billing official, |
|                       |                       |     independent       |
|                       |                       |     receipt and       |
|                       |                       |     acceptance,       |
|                       |                       |     etc.)**           |
|                       |                       |                       |
|                       |                       | -   **Ensure that     |
|                       |                       |     cardholders and   |
|                       |                       |     AOs receive all   |
|                       |                       |     necessary         |
|                       |                       |     training and      |
|                       |                       |     refresher         |
|                       |                       |     training          |
|                       |                       |     commensurate with |
|                       |                       |     their purchase    |
|                       |                       |     limits, per       |
|                       |                       |     [II.B.            |
|                       |                       | ](#_Selection_and_App |
|                       |                       | ointment_of_A%2FOPCs) |
|                       |                       |     of this Guide.**  |
+-----------------------+-----------------------+-----------------------+
| **General risk of     | **Cardholders are     | -   **During spot     |
| loss, theft, or       | required to keep      |     checks or         |
| accidental use of a   | cards on their person |     periodic reviews  |
| purchase card**       | rather than in locked |     of cardholders,   |
|                       | desks, cabinets, etc. |     ask them to       |
|                       | in order to have      |     physically        |
|                       | cards available for   |     produce their     |
|                       | use during building   |     cards and verify  |
|                       | closures or other     |     that cards are    |
|                       | emergencies. This     |     signed. Follow-up |
|                       | improves operational  |     with appropriate  |
|                       | support but may       |     action (training, |
|                       | result in a higher    |     counseling, card  |
|                       | risk of loss, theft,  |     cancellation,     |
|                       | or accidental use.**  |     etc.) for any     |
|                       |                       |     instances where   |
|                       |                       |     cardholders are   |
|                       |                       |     unable to produce |
|                       |                       |     their cards.**    |
|                       |                       |                       |
|                       |                       | -   **Monitor reports |
|                       |                       |     of loss or theft, |
|                       |                       |     and ensure that   |
|                       |                       |     cards are         |
|                       |                       |     promptly          |
|                       |                       |     cancelled.        |
|                       |                       |     Provide           |
|                       |                       |     additional        |
|                       |                       |     refresher         |
|                       |                       |     training on card  |
|                       |                       |     security if       |
|                       |                       |     needed.**         |
|                       |                       |                       |
|                       |                       | -   **AOs should      |
|                       |                       |     monitor and       |
|                       |                       |     question          |
|                       |                       |     cardholders about |
|                       |                       |     any suspicious    |
|                       |                       |     transaction.**    |
+-----------------------+-----------------------+-----------------------+
| **Newly appointed AOs | **Newly appointed AOs | -   **Perform a       |
| and cardholders**     | and cardholders have  |     review of all new |
|                       | less experience with  |     AOs and           |
|                       | the purchase card     |     cardholders       |
|                       | program's policies    |     within 90 days of |
|                       | and procedures and    |     their appointment |
|                       | may therefore have a  |     to identify       |
|                       | higher risk of        |     procedural errors |
|                       | misuse.**             |     or misuse.**      |
+-----------------------+-----------------------+-----------------------+
| **Purchase card       | **Card accounts with  | -   **Based on the    |
| accounts that have    | few merchant category |     types of products |
| few or no merchant    | restrictions provide  |     and services the  |
| category              | more flexibility for  |     card is being     |
| restrictions**        | cardholders but may   |     used to purchase, |
|                       | increase the risk of  |     consider adding   |
|                       | unauthorized          |     merchant category |
|                       | purchases.**          |     code restrictions |
|                       |                       |     to the account**  |
|                       |                       |                       |
|                       |                       | -   **Review          |
|                       |                       |     cardholder        |
|                       |                       |     transactions for  |
|                       |                       |     suspicious        |
|                       |                       |     purchases and     |
|                       |                       |     follow up as      |
|                       |                       |     necessary**       |
|                       |                       |                       |
|                       |                       | -   **Conduct         |
|                       |                       |     periodic spot     |
|                       |                       |     checks of         |
|                       |                       |     cardholders to    |
|                       |                       |     ensure            |
|                       |                       |     compliance**      |
+-----------------------+-----------------------+-----------------------+
| **Purchase card       | **This could be an    | -   **Review          |
| accounts with many    | indicator that        |     cardholder        |
| transactions at or    | purchases are being   |     transactions for  |
| near the cardholder's | split in order to     |     suspicious        |
| single purchase       | bring them under the  |     purchases and     |
| limit**               | cardholder's limit.** |     follow up as      |
|                       |                       |     necessary**       |
+-----------------------+-----------------------+-----------------------+
| **Purchase card       | **This could indicate | -   **Consider        |
| accounts where the    | that the cardholder   |     reducing the      |
| individual            | has greater purchase  |     cardholder's      |
| transaction amounts   | authority than they   |     purchase limit    |
| are significantly     | require for their     |     consistent with   |
| below the             | typical purchases.**  |     their purchase    |
| cardholder's single   |                       |     needs**           |
| purchase limit**      |                       |                       |
|                       |                       | -   **When            |
|                       |                       |     establishing new  |
|                       |                       |     card accounts,    |
|                       |                       |     ensure that       |
|                       |                       |     single purchase   |
|                       |                       |     limits reflect    |
|                       |                       |     actual needs      |
|                       |                       |     rather than       |
|                       |                       |     automatically     |
|                       |                       |     defaulting to the |
|                       |                       |     micropurchase     |
|                       |                       |     limit.**          |
+-----------------------+-----------------------+-----------------------+
| **Inactive cards      | **Cards with little   | -   **Conduct review  |
| (except for emergency | or no activity over a |     of inactive cards |
| cards issued under    | six month period are  |     semi-annually in  |
| [II.A.2.              | considered inactive.  |     accordance with   |
| ](#_Selection_and_App | Cards that are issued |     [II.              |
| ointment_of_A%2FOPCs) | solely as a backup    | D.6](#inactive-cards) |
| of this guide)**      | card for another      |     of this guide,    |
|                       | cardholder are        |     and cancel cards  |
|                       | prohibited.**         |     that are no       |
|                       |                       |     longer            |
|                       |                       |     required.**       |
+-----------------------+-----------------------+-----------------------+
| **Purchase card       | **Purchase card       | -   **Ensure          |
| transactions during   | transactions          |     car               |
| emergencies or other  | occurring during      | dholders/checkwriters |
| contingencies**       | emergencies (natural  |     identify all      |
|                       | disasters,            |     purchases in      |
|                       | biological,           |     support of the    |
|                       | radiological,         |     emergency on the  |
|                       | chemical,             |     Emergency         |
|                       | health-related, etc.) |     Purchase Log (or  |
|                       | pose a higher risk.** |     electronic        |
|                       |                       |     equivalent) for   |
|                       |                       |     anticipated       |
|                       |                       |     reporting         |
|                       |                       |     requirements to   |
|                       |                       |     Congress, GAO,    |
|                       |                       |     IG, etc.**        |
|                       |                       |                       |
|                       |                       | -   **Ensure AOs and  |
|                       |                       |     cardholders are   |
|                       |                       |     advised of any    |
|                       |                       |     changes to        |
|                       |                       |     purchase card     |
|                       |                       |     procedures or     |
|                       |                       |     changes to        |
|                       |                       |     authority levels  |
|                       |                       |     as a result of    |
|                       |                       |     the emergency.**  |
|                       |                       |                       |
|                       |                       | -   **Conduct spot    |
|                       |                       |     checks during the |
|                       |                       |     emergency for     |
|                       |                       |     compliance, and   |
|                       |                       |     post-event        |
|                       |                       |     reviews of        |
|                       |                       |     transactions.**   |
|                       |                       |                       |
|                       |                       | -   **Ensure AOs and  |
|                       |                       |     cardholders are   |
|                       |                       |     promptly alerted  |
|                       |                       |     when the          |
|                       |                       |     emergency is over |
|                       |                       |     and any special   |
|                       |                       |     emergency         |
|                       |                       |     procedures or     |
|                       |                       |     authorities       |
|                       |                       |     revert to         |
|                       |                       |     normal.**         |
+-----------------------+-----------------------+-----------------------+
| **AOs with a span of  | **As an AO's span of  | -   **If problems due |
| control of seven or   | control and monthly   |     to workload are   |
| more cardholders**    | transaction review    |     identified during |
|                       | increases, the risk   |     the annual        |
|                       | of failure to         |     review, consider  |
|                       | identify improper     |     reducing the span |
|                       | purchase transactions |     of control by     |
|                       | increases.**          |     training and      |
|                       |                       |     appointing        |
|                       |                       |     additional AOs as |
|                       |                       |     necessary.**      |
|                       |                       |                       |
|                       |                       | -   **Conduct more    |
|                       |                       |     frequent spot     |
|                       |                       |     checks or         |
|                       |                       |     surveillance of   |
|                       |                       |     AOs with spans of |
|                       |                       |     control of seven  |
|                       |                       |     or more.**        |
+-----------------------+-----------------------+-----------------------+
| **A/OPCs with a span  | **A/OPCs with more    | -   **The HHS         |
| of control greater    | than 300 AOs and      |     Purchase Card     |
| than 300 AOs and      | cardholders assigned  |     Program           |
| cardholders**         | to them may find it   |     Coordinator       |
|                       | difficult to          |     should monitor    |
|                       | adequately carry out  |     OPDIV A/OPC spans |
|                       | their program         |     of control and    |
|                       | oversight role        |     recommend         |
|                       | effectively, thereby  |     establishing      |
|                       | increasing risk.**    |     additional A/OPCs |
|                       |                       |     or assistant      |
|                       |                       |     coordinators as   |
|                       |                       |     warranted.**      |
|                       |                       |                       |
|                       |                       | -   **The HHS         |
|                       |                       |     Purchase Card     |
|                       |                       |     Program           |
|                       |                       |     Coordinator       |
|                       |                       |     should review the |
|                       |                       |     OPDIV's oversight |
|                       |                       |     and surveillance  |
|                       |                       |     process and risk  |
|                       |                       |     reduction         |
|                       |                       |     approach for      |
|                       |                       |     adequacy, and     |
|                       |                       |     recommend any     |
|                       |                       |     needed            |
|                       |                       |     improvements**    |
+-----------------------+-----------------------+-----------------------+
| **AOs or cardholders  | **AOs and cardholders | -   **Increased       |
| that have had         | that have violated    |     surveillance and  |
| previous instances of | procedures in the     |     spot checks to    |
| misuse, the nature of | past may have a       |     ensure            |
| which was such that   | higher risk of future |     compliance.**     |
| termination of their  | violations**          |                       |
| cardholder or AO      |                       | -   **Cancel cards    |
| duties was deemed to  |                       |     for cardholder    |
| be unnecessary**      |                       |     repeat offenders, |
|                       |                       |     or train and      |
|                       |                       |     assign new AOs    |
|                       |                       |     for repeat AO     |
|                       |                       |     violations.       |
|                       |                       |     Follow guidelines |
|                       |                       |     in                |
|                       |                       |     [IV.D.            |
|                       |                       | 4.](#potential-conseq |
|                       |                       | uences-for-purchase-c |
|                       |                       | ard-fraud-and-misuse) |
|                       |                       |     to determine the  |
|                       |                       |     appropriate       |
|                       |                       |     response to       |
|                       |                       |     instances of      |
|                       |                       |     misuse.**         |
+-----------------------+-----------------------+-----------------------+
| **Convenience check   | **Convenience checks  | -   **Conduct more    |
| users**               | pose a greater risk   |     frequent spot     |
|                       | of misuse because     |     checks for        |
|                       | they have fewer       |     convenience check |
|                       | controls over their   |     users.**          |
|                       | use.**                |                       |
|                       |                       | -   **Ensure that     |
|                       |                       |     convenience       |
|                       |                       |     checks are        |
|                       |                       |     adequately        |
|                       |                       |     safeguarded and   |
|                       |                       |     transactions are  |
|                       |                       |     properly logged   |
|                       |                       |     and identified.** |
|                       |                       |                       |
|                       |                       | -   **Review          |
|                       |                       |     convenience check |
|                       |                       |     usage and cancel  |
|                       |                       |     checks for users  |
|                       |                       |     that no longer    |
|                       |                       |     require them.**   |
+-----------------------+-----------------------+-----------------------+
| **Cardholders who are | **This situation is   | -   **Increased       |
| a higher grade than   | discouraged, and AOs  |     surveillance of   |
| their AO**            | should be at an       |     cardholder        |
|                       | equivalent or higher  |     transactions.**   |
|                       | grade level. However, |                       |
|                       | when organizational   | -   **Conduct spot    |
|                       | circumstances prevent |     checks of AOs and |
|                       | this, there is a      |     cardholders to    |
|                       | higher risk that the  |     ensure compliance |
|                       | cardholder may exert  |     with policies and |
|                       | undue influence over  |     procedures.**     |
|                       | the AO's actions due  |                       |
|                       | to the disparity in   |                       |
|                       | grade or position.**  |                       |
+-----------------------+-----------------------+-----------------------+
| **Cardholders who are | **Cardholders whose   | -   **Increased       |
| physically or         | duties require them   |     surveillance of   |
| geographically        | to be "on the road"   |     cardholder's      |
| removed from an       | or to operate outside |     transactions with |
| office environment or | of a typical work     |     follow-up of      |
| their AO**            | environment may pose  |     questionable      |
|                       | a higher risk of card |     purchases.**      |
|                       | abuse or misuse.**    |                       |
+-----------------------+-----------------------+-----------------------+
| **AO absence**        | **The cardholder's AO | -   **A/OPCs should   |
|                       | is absent due to      |     temporarily       |
|                       | leave, illness,       |     assign            |
|                       | temporary assignment, |     cardholders to    |
|                       | etc. This situation   |     another AO to     |
|                       | may lead to improper  |     review            |
|                       | purchases if          |     transactions.**   |
|                       | cardholder believes   |                       |
|                       | transactions will not |                       |
|                       | be reviewed by a      |                       |
|                       | trained AO.**         |                       |
+-----------------------+-----------------------+-----------------------+
|                       |                       |                       |
+-----------------------+-----------------------+-----------------------+

## Reviews, Surveillance, and Reporting

> Purchase card reports and reviews are important tools for managing the
> program and monitoring performance over time. To that end, [Appendix
> E](#appendix-e.-purchase-card-reviews-and-reports) summarizes required
> reports and reviews associated with the purchase card program, as well
> as available servicing bank reports to assist in the preparation of
> reports and conduct of reviews. A/OPCs will also conduct and support
> purchase card reviews and surveillance activities as directed by the
> HHS Purchase Card Program Coordinator. The following section provides
> greater detail regarding high-visibility reviews conducted under the
> HHS Purchase Card Program framework.

#### Reviews and Reporting Requirements

> **[OMB Quarterly Reports]{.underline}**
>
> In accordance with OMB Circular A-123, Appendix B, HHS' Purchase Card
> Program Coordinator is responsible for providing quarterly reports to
> OMB 45 days following the end of each quarter. Some of the following
> metrics are available through bank reports. In other cases, the HHS
> Purchase Card Program Coordinator will require the OPDIV A/OPCs to
> submit their data to ASAM/OAMP three weeks after the end of each
> quarter to facilitate preparation of the report. The metrics required
> for the OMB report are as follows:

-   Number of cards

-   Number of active accounts

-   Percentage of employees that are cardholders

-   Net number of new accounts (new less cancelled)

-   Charge card dollars spent; total refunds earned; percentage of
    potential refunds earned

-   Number of cases reported to the agency Office of Inspector General
    or A/OPC for possible card misuse and/or abuse

-   Number of administrative and/or disciplinary actions taken for card
    misuse, including delinquency (if known)

-   Number of AOs

-   Ratio of AOs to purchase cardholders (span of control)

-   Average number of monthly purchase card transactions reviewed per
    approving official

-   Number of cardholders with authority of \$3,000 or less

-   Number of cardholders with authority over \$3,000 who hold warrants

-   Number of cardholders with authority over \$3,000 who do not hold
    warrants

> **[Purchase Card Management Plan]{.underline}**
>
> The HHS Purchase Card Program Coordinator is required to maintain a
> purchase card management plan consistent with the requirements of OMB
> Circular A-123, Appendix B. A copy of the plan shall be submitted to
> OMB, Office of Federal Financial Management, on an annual basis, not
> later than January 31 of each calendar year. The findings from the
> annual OPDIV and Departmental reviews of the card program will be
> factored into the card management plan.
>
> **[Annual OPDIV Reviews]{.underline}**
>
> A/OPCs are required to ensure that a review of their AO accounts,
> including associated cardholder accounts, is conducted annually. If
> the Finance Office is also conducting cardholder audits for financial
> and accounting purposes, the A/OPC should coordinate review efforts
> with the Finance Office to avoid duplication of effort and to minimize
> disruption to operations. A/OPCs should use [Appendix
> F](#appendix-f.-purchase-card-review-checklist) and the review and
> surveillance methods described in Table 6 below as internal tools in
> the conduct of these reviews. A/OPC review results must be reflected
> in the template entitled OPDIV Annual Report of Program Performance
> (see [Appendix B](#appendix-b.-templates)) and furnished to the HHS
> Purchase Card Program Coordinator by October 31 each year. HHS'
> Purchase Card Program Coordinator will, in turn, assimilate OPDIV
> review results into a Department-wide report for ASAM/OAMP's review by
> December 31 each year. This report will also serve as the basis from
> which the HHS Purchase Card Program Coordinator prepares HHS' Purchase
> Card Management Plan for submission to OMB and GSA.
>
> The OPDIV reports will cover the review results from the previous
> fiscal year, and contain, at a minimum, the following:

-   Number and percentage of OPDIV AOs and cardholders reviewed

-   Number and percentage of OPDIV purchase card transactions reviewed

-   The method(s) used to conduct the reviews

-   A summary of significant findings, including fraud, waste, abuse, or
    misuse, based on the OPDIV annual program reviews conducted in
    accordance with [this](#reviews-and-reporting-requirements) section
    and [Appendix F](#appendix-f.-purchase-card-review-checklist) of the
    Guide.

-   A description of corrective and/or disciplinary actions taken

-   A description of any exceptional performance and/or best practices,
    if applicable

-   Recommendations for program improvements, if any.

> A/OPCs may use a variety of methods, consistent with available
> resources, to conduct reviews and surveillance of their purchase card
> program. Table 6 below discusses the advantages and disadvantages of
> various methods.

+-----------------+-----------------+-----------------+-----------------+
| ***Table 6.     |                 |                 |                 |
| Review Methods  |                 |                 |                 |
| for Purchase    |                 |                 |                 |
| Card Oversight  |                 |                 |                 |
| and             |                 |                 |                 |
| Surveillance*** |                 |                 |                 |
+=================+=================+=================+=================+
| **Method**      | **Description** | **Advantages**  | **              |
|                 |                 |                 | Disadvantages** |
+-----------------+-----------------+-----------------+-----------------+
| **Statistical   | **Statistical   | -   **Allows    | -   **Requires  |
| sampling**      | sampling        |     review      |     knowledge   |
|                 | involves        |     results to  |     of          |
|                 | selecting a     |     be          |     statistics  |
|                 | random sample   |     projected   |     to          |
|                 | from the        |     to the      |     determine   |
|                 | transactions    |     entire      |     sample      |
|                 | occurring       |                 |     size,       |
|                 | during the      |    population** |     selection,  |
|                 | review period   |                 |     and         |
|                 | and analyzing   | -   **Minimizes |     projection  |
|                 | those           |     possible    |     to entire   |
|                 | transactions    |     bias in the |                 |
|                 | for compliance. |     sample      |    population** |
|                 | This is the     |     selection   |                 |
|                 | preferred       |     process**   | -   **Requires  |
|                 | approach if     |                 |     resources   |
|                 | time and        | -   **Can be    |     to identify |
|                 | resources are   |     applied to  |     and select  |
|                 | sufficient.**   |     individual  |     the sample, |
|                 |                 |                 |     and to      |
|                 |                 |    cardholders, |     review      |
|                 |                 |     AOs, or to  |                 |
|                 |                 |     the entire  |    transactions |
|                 |                 |                 |     in the      |
|                 |                 |  organization** |     sample**    |
+-----------------+-----------------+-----------------+-----------------+
| **Non-random    | **This is a     | -               | -   **Review    |
| sampling**      | non-random      |    **Simplifies |     results     |
|                 | method of       |     sample      |     cannot be   |
|                 | selecting a     |     selection** |     projected   |
|                 | sample based on |                 |     to the      |
|                 | judgmental      | -   **Can be    |     entire      |
|                 | factors, such   |     easily      |                 |
|                 | as reviewing a  |     scaled to   |    population** |
|                 | single month's  |     fit the     |                 |
|                 | transactions,   |     resources   | -   **The       |
|                 | or selecting    |     available   |     sample may  |
|                 | questionable    |     for         |     be biased   |
|                 | transactions    |     conducting  |     and not be  |
|                 | for review.**   |     the         |     indicative  |
|                 |                 |     review**    |     of overall  |
|                 |                 |                 |                 |
|                 |                 |                 |    performance, |
|                 |                 |                 |     whether     |
|                 |                 |                 |     positive or |
|                 |                 |                 |     negative**  |
+-----------------+-----------------+-----------------+-----------------+
| **Data mining** | **This is a     | -   *           | -               |
|                 | form of         | *Software-based |    **Additional |
|                 | non-random      |     data mining |     expense to  |
|                 | sampling that   |     can screen  |     acquire and |
|                 | typically       |     and         |     use         |
|                 | employs         |     identify    |     software**  |
|                 | software        |     suspicious  |                 |
|                 | (either         |                 | -   **Cannot    |
|                 | bank-developed  |    transactions |     project     |
|                 | or third-party) |     faster than |     results to  |
|                 | to identify     |     a manual    |     the entire  |
|                 | suspicious      |     review of   |                 |
|                 | transactions or |     the data**  |    population** |
|                 | patterns in the |                 |                 |
|                 | data.**         | -   **Serves as | -               |
|                 |                 |     a good      |    **Subtleties |
|                 |                 |     compliance  |     and         |
|                 |                 |     technique   |     exceptions  |
|                 |                 |     by directly |     in data may |
|                 |                 |     targeting   |     generate    |
|                 |                 |     suspicious  |     false       |
|                 |                 |                 |     positives** |
|                 |                 |  transactions** |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Spot checks** | **These are     | -   **Useful    | -   **Cannot    |
|                 | random, on-site |     for         |     project     |
|                 | or desk reviews |     ensuring    |     results to  |
|                 | of cardholders, |     compliance  |     the         |
|                 | AOs, etc.**     |     because     |                 |
|                 |                 |     personnel   |    population** |
|                 |                 |     never know  |                 |
|                 |                 |     when they   | -   **Requires  |
|                 |                 |     may be      |     resources   |
|                 |                 |     reviewed**  |     to conduct  |
|                 |                 |                 |     the         |
|                 |                 | -   **Useful    |     reviews**   |
|                 |                 |     for         |                 |
|                 |                 |     targeting   |                 |
|                 |                 |     high-risk   |                 |
|                 |                 |     areas**     |                 |
+-----------------+-----------------+-----------------+-----------------+
|                 |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+

> A/OPCs may conduct their reviews either on-site at the cardholder's or
> AO's workstation, or by requesting copies of documentation from the
> cardholder and/or AO. Where resources permit, the on-site method
> should be used.
>
> [Appendix F](#appendix-f.-purchase-card-review-checklist) provides a
> review checklist for A/OPCs to assist with their reviews of
> cardholders and AOs. At a minimum, OPDIV reviews shall cover all the
> factors on the checklist (as applicable), and may include additional
> factors. A/OPCs may use a locally-developed template and/or database
> to capture the results of their reviews, and shall provide the HHS
> Purchase Card Program Coordinator with access to the results upon
> request.
>
> **[Departmental Reviews]{.underline}**
>
> In order to support OMB reporting requirements, the HHS Purchase Card
> Program Coordinator is required to conduct an annual review and
> assessment of the HHS Purchase Card program. This assessment should
> address the following elements:

-   Adequacy of the HHS purchase card program management controls

-   OPDIV A/OPC implementation of the purchase card program, including:

```{=html}
<!-- -->
```
-   A/OPC knowledge of purchase card policies and procedures

-   Verification of AO and cardholder selection and appointment
    procedures

-   Verification of training and delegation of authority procedures

-   Verification of A/OPC monitoring and surveillance activities, and
    use of bank reports and purchase card data

-   Resolution of cases involving fraud, waste, abuse or misuse

```{=html}
<!-- -->
```
-   The degree of OPDIV managers' satisfaction with the card program,
    which may be obtained through various feedback mechanisms such as
    formal or informal surveys, interviews, focus groups, meetings, etc.

-   Identification of program weaknesses and recommendations for
    improvement

> **[Convenience Check Reviews]{.underline}**
>
> AOs, through their cognizant A/OPCs, are required to review all
> convenience check transactions on a semi-annual basis, both at the
> transaction and account level to ensure that check use is in
> compliance with "Convenience Check Policies," as set forth in
> [III.D.1](#convenience-check-policies). The template for AOs, entitled
> Approving Official Semi-annual Review of Convenience Check Use, is
> shown in [Appendix B](#appendix-b.-templates). The AO should complete
> the template for each cardholder electronically and e-mail it to the
> A/OPC. The A/OPC will then use the AO reports to complete a summary
> report, entitled A/OPC Official Semi-annual Review of Convenience
> Check Use, and send to the HHS Purchase Card Program Coordinator. The
> A/OPC summary report is shown in [Appendix B](#appendix-b.-templates).
> The report should be completed electronically and e-mailed to the HHS
> Purchase Card Program Coordinator. These reports will be used by the
> HHS Purchase Card Program Coordinator to continually assess HHS'
> overall need for convenience checks, number of convenience check
> accounts holders, and appropriate use of checks.
>
> **[Inactive and Emergency Purchase Card Reviews]{.underline}**
>
> A/OPCs are required to review purchase card activity on a semi-annual
> basis. This review will consist of an analysis of the servicing bank's
> inactive card reports, and the OPDIV A/OPCs "Status of Inactive or
> Emergency Purchase Card" justifications obtained in accordance with
> [II.D.6](#inactive-cards). A/OPCs will submit a report describing the
> result of their review of inactive card use to the HHS Purchase Card
> Program Coordinator. The HHS Purchase Card Program Coordinator will
> provide the A/OPCs with the instructions, standard format, layout,
> and/or media to be used for submitting the report. The A/OPC report
> will be used by the HHS Purchase Card Program Coordinator to ensure
> that HHS does not have a proliferation of unused cards or unnecessary
> emergency cards, and to assist in preparation of the annual OMB card
> plan reporting requirements.
>
> **[HHS Office of Inspector General Reviews]{.underline}**
>
> The HHS Office of Inspector General (OIG) conducts independent reviews
> of HHS purchase card transactions on an ongoing basis. The purpose of
> these reviews is to determine whether HHS purchase card transactions
> are made in accordance with applicable laws, regulations, and
> policies, and to uncover any cases of fraud or misuse. Results of OIG
> reviews are provided to the A/OPCs and ASAM/OAMP, and appropriate
> corrective or disciplinary actions will be taken as needed.

#### Reviews by External Organizations

> A/OPCs may receive requests for reviews and purchase card information
> from external organizations, such as the GAO, an Inspector General,
> OMB, Congress, etc. All requests for reviews and purchase card
> information from external organizations must be referred to, and
> coordinated with, ASAM/OAMP. A/OPCs are required to safeguard
> cardholder records and data and coordinate with ASAM/OAMP before
> releasing any information to external organizations. A/OPCs shall
> cooperate with external reviewing organizations that have been cleared
> through ASAM/OAMP.

## Fraud and Misuse

#### General

> Any intentional or unintentional violation of the policies and
> procedures for purchase card and/or convenience check usage is
> considered misuse. Fraud is a criminal form of misuse involving
> willful deceit, misrepresentation of facts, or other practice designed
> to harm or deprive another of his or her rights, usually involving
> deception for personal gain. The distinction between misuse and fraud
> is dependent upon the facts of each case.
>
> All HHS participants in the HHS purchase card program are responsible
> for preventing fraud and the conditions that lead to fraud. Fraud
> often occurs when two or more individuals collude to circumvent the
> management controls in place to prevent fraudulent practices.
> Collusion may occur between merchants and cardholders, cardholders and
> AOs, or between purchase card program participants and other
> employees. Employees are required to report all instances of suspected
> fraud and misuse (See D.3. below).

#### Indicators of Fraud and Misuse

> Suspected purchase card misuse and fraud often have the same or
> similar indicators. A determination of whether the misuse is
> fraudulent may only be possible after a thorough investigation.
> Therefore, all suspected cases must be reported. A/OPCs are required
> to review bank purchase card data and reports on a regular basis to
> identify and investigate possible instances of fraud or misuse. The
> following examples of misuse could also be potential indicators of
> fraud:

-   Repetitive purchases from the same merchant in situations where the
    cardholder should be rotating purchases among more than one merchant

-   Missing purchase documentation

-   Cardholders or AOs who allow others to use the card

-   Failure to safeguard cards, checks, or account information

-   Lack of oversight and surveillance of cardholders and/or AOs

-   Unauthorized purchases (unnecessary purchases, personal purchases,
    purchases of prohibited products or services, etc.)

-   Payments made for items that were never received

-   Split purchases made to avoid spending limits

-   Failure to account for nonexpendable or sensitive items per property
    management procedures

-   Approval of a cardholder's purchases by someone other than the
    cardholder's AO (or temporary alternate AO)

-   Cardholders returning items to a merchant for a store credit instead
    of a credit to their purchase card account

-   Attempted purchases that exceed the cardholder's limits

-   Purchases that have been declined by the card system

-   Cash advances or convenience checks written to "Cash"

#### Reporting Suspected Fraud or Misuse

> Employees are responsible for reporting cases of suspected fraud or
> misuse of the purchase card and/or convenience checks. Employees who
> suspect purchase card or convenience check fraud should immediately
> call 1-800-HHS-TIPS or contact their local OIG Office of
> Investigations. The OIG will coordinate with the appropriate A/OPC on
> any actions it takes in response to a fraud allegation.
>
> Employees should report instances of purchase card or convenience
> check misuse (other than suspected fraud) to their A/OPC. A/OPCs will
> take immediate action to ensure that all instances of misuse are
> promptly reported and investigated. Also, upon learning of misuse,
> A/OPCs should notify and/or coordinate actions, as necessary, with the
> OIG Office of Investigations, servicing bank, General Counsel, finance
> office, OPDIV supervisory chain, and the HHS Purchase Card Program
> Coordinator.

#### Potential Consequences for Purchase Card Fraud and Misuse

> Government purchase cards and convenience checks are for official use
> only. Personal purchases are not permitted, nor are purchases of any
> unauthorized products or services. Violations of HHS purchase card
> policies and procedures may result in immediate cancellation of the
> card and disciplinary action against the cardholder, AO, or both. The
> range of disciplinary actions, which may vary with the severity of the
> infraction, will be applied in accordance with HHS employee relations,
> legal, and management guidelines.
>
> Intentional misuse of the card will be considered an attempt to commit
> fraud against the U.S. Government, and in addition to the disciplinary
> actions in Table 7 below, the individual may be subject to a fine of
> not more that \$10,000, or imprisonment for not more than 5 years, or
> both under 18 U.S.C. 287.

Cardholders who intentionally misuse their cards will be held personally
liable to the Government for the amount of any unauthorized
transactions, plus interest and debt collection fees. AOs or others who
collude with cardholders to misuse the card or to commit fraud, or who
use their position or authority to cause misuse of the card, will also
be subject to the disciplinary and criminal actions in Table 7 below.

> Table 7 lists potential consequences and penalties for fraud or misuse
> of the purchase card. A/OPCs shall use the table as a guide for
> disciplinary measures, coordinating with the HHS Office of Inspector
> General, Office of General Counsel, Human Resources Office, and
> management chain, as appropriate.

+-----------------------------------+-----------------------------------+
| ***Table 7. Consequences for      |                                   |
| Purchase Card Fraud and Misuse*** |                                   |
+===================================+===================================+
| Infraction                        | Potential Consequences for        |
|                                   | Infraction                        |
+-----------------------------------+-----------------------------------+
| Fraud, Waste, and Abuse           | -   **Card cancellation**         |
|                                   |                                   |
| **Intentional use of the purchase | -   **Termination of employment** |
| card for unauthorized purchases   |                                   |
| or the approval of unauthorized   | -   **Fines and/or imprisonment** |
| transactions**                    |                                   |
|                                   | -   **Salary offset to collect    |
|                                   |     full cost of unauthorized     |
|                                   |     purchases including           |
|                                   |     administrative expenses**     |
+-----------------------------------+-----------------------------------+
| False Statements                  | -   **Card cancellation**         |
|                                   |                                   |
| **False statements on purchase    | -   **Reprimand**                 |
| card records by cardholders       |                                   |
| and/or AO's**                     |                                   |
+-----------------------------------+-----------------------------------+
| Personal Misuse                   | -   **Counseling**                |
|                                   |                                   |
| **Unintentional use of the        | -   **Cardholder payment to HHS   |
| purchase card for unauthorized    |     required to cover full cost   |
| purchases**                       |     of unauthorized purchases and |
|                                   |     possible administrative       |
|                                   |     expenses**                    |
+-----------------------------------+-----------------------------------+
| Card Transfers                    | -   **Counseling**                |
|                                   |                                   |
| **Transfer of purchase card to    |                                   |
| any person other than the         |                                   |
| cardholder**                      |                                   |
+-----------------------------------+-----------------------------------+
| Failure to Maintain Card Security | -   **Counseling**                |
|                                   |                                   |
| **Failure to safeguard physical   |                                   |
| location of the card and card     |                                   |
| account information**             |                                   |
+-----------------------------------+-----------------------------------+
|                                   |                                   |
+-----------------------------------+-----------------------------------+

## Refund Management

> The servicing bank provides refunds (rebates) to OPDIVs in accordance
> with the HHS task order under the SmartPay master contract. The bank
> offers rebates based on the dollars spent during a given time period,
> the timeliness or frequency of payments made to the bank, and to
> correct erroneous payments made to the bank.
>
> In OPDIVs that do not assign default CANs to purchase card
> transactions and do not automatically pay invoices upon receipt,
> A/OPCs are responsible for reviewing delinquency reports and taking
> appropriate actions to ensure that cardholders and AOs are processing
> their accounts in a timely manner.
>
> The HHS Purchase Card Program Coordinator is responsible for reviewing
> the Department's purchase card refund agreement as follows:

-   Quarterly, to ensure that the proper amounts are refunded

-   Annually, to benchmark the Department's agreement with those of
    other Government agencies to prepare for re-bid of the task order

-   Prior to re-bid of the task order

## Strategic Sourcing

> ASAM/OAMP is committed to improving HHS acquisition performance
> through a continual effort to identify strategic sourcing vendors and
> negotiate favorable HHS-wide contracts or agreements with those
> vendors. To achieve this objective, OAMP performs spend analyses on
> HHS purchase card data to identify card spending patterns, determine
> actual/estimated savings, and identify candidates for potential
> strategic sourcing initiatives.
>
> Through annual purchase card training, cardholders will become aware
> of all applicable strategic sourcing contracts and agreements and the
> importance of using these instruments to maximize potential savings.

# Appendix A. Authorizing Contractors' Use of GSA's SmartPay Program {#appendix-a.-authorizing-contractors-use-of-gsas-smartpay-program .unnumbered}

Only cost reimbursement contractors are eligible to use GSA's SmartPay
program to acquire goods or services to further the objectives of a
Government contract. The authorization is granted in accordance with the
policies and procedures prescribed in FAR Part 51.101, Use of Government
Supply Sources. FAR provisions require that the contractor receives a
letter of authorization from his/her contracting officer before
submitting the request to GSA to use the source of supply in performance
of the contract.

GSA will furnish the contractor an application for other-than-Federal
agencies to use the SmartPay program as a source of supply in
performance of the contract upon receipt of the contracting officer's
letter of authorization. The completed application provides GSA the
information for determining contractor's eligibility and the
contractor's agreement to abide by the terms and conditions for program
participation. Definitions and guidelines concerning eligibility may be
found on GSA's website: <http://www.gsa.gov/portal/gsa.> The website
also provides a downloadable version of the application. The completed
application may be electronically submitted or mailed to GSA, Federal
Supply Service (FCXC), 1941 Jefferson Davis Highway, Arlington, VA
22202.

Contractors determined by GSA as eligible to use the SmartPay program as
a source of supply in performance of the contract will receive a letter
from GSA with instructions for placing an order under GSA's master
contract for Government-wide commercial card service. A full copy of the
contract (GS-23F-98002) may be found on GSA's website:
[http://www.gsasmartpay.gov](http://www.gsasmartpay.gov/). The website
includes a task order guide, an overview of the program, and samples for
developing requests for proposals.

The contractor using the SmartPay program is responsible for the
administrative and staffing requirements for program compliance. This
includes, but is not limited to, program management and structure,
account maintenance, prompt payment, training, and monitoring of cards
for appropriate usages. HHS employees may not serve as A/OPCs, AOs, or
cardholders in the contractor's charge card program. The responsibility
for ensuring that the contractor's card service program is in accordance
with Federal and departmental regulations is shared between the
cognizant HHS contracting officer and the project officer.

The contracting officer has the duty to promptly report any contractor's
improper management of the purchase card program to GSA. GSA has
complete authority to settle disputes and to terminate the contract with
the bank for the card service program.

# Appendix B. Templates {#appendix-b.-templates .unnumbered}

This appendix contains the following templates:

  ---------------------------------------------------- ----------------------------------------------------------------------- ----------
  Template                                             Guide Reference                                                         Page
                                                                                                                               Number

  **Cardholder and Approving Official Training         [**II.B.1**](#purchase-card-training)                                   **B-2**
  Certification**                                                                                                              

  **Request for New Cardholder/Checkwriter**           [**II.A.3.**](#nominating-prospective-aos-and-cardholders)              **B-3**

  **Request for New Approving Official**               [**II.A.3.**](#nominating-prospective-aos-and-cardholders)              **B-4**

  **Standard Delegation of Procurement Authority       **[II.A.3.](#nominating-prospective-aos-and-cardholders)**              **B-5**
  Memo**                                                                                                                       

  **Status of Inactive or Emergency Purchase Card**    [**II.D.6.**](#inactive-cards)                                          **B-6**

  **Emergency Purchase Log for                         [**III.F.3.**](#identifying-purchases-made-in-support-of-emergencies)   **B-8**
  Cardholders/Checkwriters**                                                                                                   

  **Approving Official Semi-annual Review of           [**IV.C.2.**](#reviews-and-reporting-requirements)                      **B-10**
  Convenience Check Use**                                                                                                      

  **A/OPC Semi-annual Review of Convenience Check      [**IV.C.2.**](#reviews-and-reporting-requirements)                      **B-11**
  Use**                                                                                                                        

  **OPDIV Annual Report of Program Performance**       [**IV.C.2.**](#reviews-and-reporting-requirements)                      **B-12**
  ---------------------------------------------------- ----------------------------------------------------------------------- ----------

**Cardholder and Approving Official Training Certification**

I certify, as a □ cardholder and/or checkwriter or □ approving official
(AO), that I have successfully completed all required purchase card
training for my level of authority, and that I have read, understand,
and will abide by the policies and procedures that govern the use of the
Government purchase card (and convenience checks, if authorized) at HHS
as described in the HHS Purchase Card Guide and any OPDIV-specific
supplemental procedures.

**[Terms and Conditions for Cardholders and Checkwriters:]{.underline}**

I further certify that I:

-   will only use the card and/or convenience checks for official
    purchases, within the dollar limitations designated for my card, and
    only when sufficient funds are available

```{=html}
<!-- -->
```
-   will only purchase authorized products or services, and will seek
    guidance from the A/OPC before making a purchase in any case were
    doubt exists as to the legitimacy of a purchase

-   will protect the card and/or convenience checks from unauthorized
    use, and will immediately report the loss or theft of the
    card/checks in accordance with HHS and OPDIV procedures

-   will surrender the card and/or convenience checks upon termination
    of employment or at any time upon the request of the A/OPC

-   will comply with all audit requests in a timely manner

-   understand that willful misuse of the card and/or convenience checks
    may result in immediate cancellation of the card/checks and
    disciplinary action against me

**[Terms and Conditions for Approving Officials:]{.underline}**

I further certify that I:

-   will examine all cardholder documentation related to card and/or
    convenience check transactions to ensure that purchases are based on
    a bona fide need

-   will resolve any questionable purchases with the cardholder

-   will ensure that the cardholder's purchase transactions are properly
    reconciled with the servicing bank's statement

-   will immediately notify my A/OPC of any suspected cases of misuse or
    fraud

Organization\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Printed Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**Request for New Cardholder/Checkwriter**

Date:

To: \[Insert OPDIV A/OPC\]

From: \[Insert name of requesting official -- at AO level or above\]

The following individual is nominated to be a purchase cardholder and/or
convenience checkwriter:

  ----------------------------------- -----------------------------------
  CARDHOLDER INFORMATION              

  **Name:**                           **Job Title:**

  **Series:**                         **Grade:**

  **Organization:**                   **Address:**

  **Building/Room/Location:**         **City:**

  **State:**                          **Zip:**

  **Phone:**                          **Fax:**

  **E-mail:**                         **Date Purchase Card Training
                                      (including Green-Purchasing and
                                      Section 508 requirements)
                                      Completed:**

  FINANCIAL INFORMATION               

  **Proposed Single Purchase Limit:   **Proposed Monthly Purchase Limit:
  \$**                                \$**

  **Default CAN (if required):**      **Default Object Class Code (if
                                      required):**

  **Warrant Value (if applicable):    
  \$**                                

  APPROVING OFFICIAL INFORMATION      

  **Approving Official (if different  
  from requestor):**                  

  **Approving Official's Grade:**     **Approving Official's Monthly
                                      Office Limit: \$**
  ----------------------------------- -----------------------------------

Justification for card, including the anticipated products or services
the card will be used to purchase:

Is the card for emergency use only, or day-to-day requirements? Are the
requirements new? Yes No If Yes, identify the new requirements. If No,
how were the requirements purchased previously?

If convenience checks are requested for the individual, provide a
justification that describes the circumstances under which checks will
be written:

+--------------------------------------------------------+-------------+
| **Signature of requesting official or AO:**            | **Date:**   |
|                                                        |             |
| **(typed name if submitting by e-mail)**               |             |
+--------------------------------------------------------+-------------+
|                                                        |             |
+--------------------------------------------------------+-------------+
| **Approved by (if required by OPDIV):**                | **Date:**   |
|                                                        |             |
| **(typed name if submitting by e-mail)**               |             |
+--------------------------------------------------------+-------------+

**Request for New Purchase Card Approving Official**

Date:

To: \[Insert OPDIV A/OPC\]

From: \[Insert name of requesting official -- at AO level or above\]

The following individual is nominated to be a primary or alternate
purchase card Approving Official:

  ----------------------------------- -----------------------------------
  **Name:**                           **Job Title:**

  **Series:**                         **Grade:**

  **Organization:**                   **Address:**

  **Building/Room/Location:**         **City:**

  **State:**                          **Zip:**

  **Phone:**                          **Fax:**

  **E-mail:**                         **Date Purchase Card Training
                                      (including Green-Purchasing and
                                      Section 508 requirements)
                                      Completed:**

  **Warrant Value (if applicable):    
  \$**                                
  ----------------------------------- -----------------------------------

List all existing or prospective cardholders that will report to this
Approving Official:

  ---------------------------------- ---------- -------------------------
  Cardholder Name                    Grade      Monthly Purchase Limit

                                                **\$**

                                                **\$**

                                                **\$**

                                                **\$**

                                                **\$**

                                                **\$**

                                                **\$**

                                                **\$**

                                                **\$**

                                                **\$**

  Total Monthly Purchase Limit:                 \$
  ---------------------------------- ---------- -------------------------

+--------------------------------------------------------+-------------+
| **Signature of requesting official:**                  | **Date:**   |
|                                                        |             |
| **(typed name if submitting by e-mail)**               |             |
+--------------------------------------------------------+-------------+
|                                                        |             |
+--------------------------------------------------------+-------------+
| **Approved by (if required by OPDIV):**                | **Date:**   |
|                                                        |             |
| **(typed name if submitting by e-mail)**               |             |
+--------------------------------------------------------+-------------+

Date:

From: \[HCA or Designee Name\]

To: \[Cardholder Name\]

Subject: Delegation of Procurement Authority for Micropurchases using
the Government Purchase Card

In accordance with Federal Acquisition Regulation (FAR) Subpart 1.6, and
HHS Acquisition Regulation (HHSAR) Subpart 301.6, you are hereby
delegated authority to make official purchases for your organization
using the Government Purchase Card under the GSA SmartPay® Program. All
purchases made under your authority are subject to the FAR, HHSAR, HHS
Purchase Card Guide and any OPDIV procedures. Your authority is subject
to the following limitations:

> Single Purchase Limit:
>
> □ Micropurchase Threshold as defined at FAR 2.101 (currently \$3,000
> for all products and for services not subject to the Service Contract
> Act; \$2,500 for services subject to the Service Contract Act; \$2,000
> for construction; the thresholds for contingency and nuclear,
> biological, chemical, or radiological incidents (as determined by the
> head of the agency per FAR 13.201(g)); or other higher threshold
> established by law, regulation, Executive Order, or other directive),
> **OR**
>
> □ \$\_\_\_\_\_\_\_\_\_\_\_ for purchase of all products, and for
> services not subject to the Service Contract Act \[Amount not to
> exceed \$3,000\]
>
> □ \$\_\_\_\_\_\_\_\_\_\_\_ for purchase of services subject to the
> Service Contract Act \[Amount not to exceed \$2,500\]
>
> □ \$\_\_\_\_\_\_\_\_\_\_\_ for purchase of construction \[Amount not
> to exceed \$2,000\]
>
> Monthly (Billing Cycle) Purchase Limit: □ \$\_\_\_\_\_\_\_\_\_\_\_
> **OR** □ As determined by the A/OPC
>
> □ Additional restrictions, limits, or conditions on card use as
> specified below:
>
> \[List any additional restrictions on card use here\]

Your Agency/Organization Program Coordinator (A/OPC) is: \[A/OPC Name,
Phone, E-mail\]

This delegation of authority becomes effective when you receive a
purchase card from the servicing bank embossed with your name. This
delegation of authority shall not be redelegated or transferred to
another person. This delegation of authority shall remain in effect
until you are transferred or terminate your employment, or until the
delegation is suspended, modified, or canceled. This delegation of
authority will be subject to periodic review. If you have any questions
regarding your authority, please contact your A/OPC.

\[Signature and Title of HCA or Designee\]

**Status of Inactive or Emergency Purchase Card**

Date:

From: \[Insert Name of A/OPC\]

To: \[Insert Name of Approving Official\]

Subject: Purchase Card ending in \_\[insert last six digits of card\]
Cardholder Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

A recent review of purchase card activity indicates that the subject
card may be inactive based on the following:

> □ Card had no activity during the past 6 months
>
> □ Card had transactions totaling \$\_\_\_\_\_\_\_\_\_ from
> \_\_\_\_\_\_\_\_\_\_\_ to \_\_\_\_\_\_\_\_\_\_.

Please review the subject card and complete, date, and sign this form
and return it to your A/OPC by \_\_\_\_\_\_\_\_\_\_. Failure to complete
this form will result in cancellation of the card.

**Approving Official Determination**

I have reviewed this purchase card and have determined the following:

> □ Card is no longer needed and should be canceled for the following
> reason(s):
>
> □ Cardholder has transferred to another office or has left the
> organization
>
> □ Cardholder no longer wants to retain the card
>
> □ There are no requirements to justify need for a card
>
> □ Requirements are being satisfied by another cardholder or through
> other means
>
> □ Other (explain)
>
> □ Card is still required for the following reason:
>
> □ Card is to be used for emergencies. The cardholder has been
> designated as an "emergency employee" or a "mission-critical emergency
> employee" under an emergency response plan or continuity of operations
> plan (COOP), or is an active duty officer in the Public Health
> Services' Commissioned Corps. (Note: Use of card as a "backup card"
> for another cardholder does not qualify as an emergency use and is not
> permitted.) Cardholder has been verified to be in physical possession
> of the card.
>
> □ Office requirements exist but demand patterns are highly variable.
> Estimated use is \$\_\_\_\_\_\_\_\_\_\_\_ during the next 6 months.
> Indicate the major types of products or services that are anticipated
> to be ordered during the next 6 months.
>
> □ Other (explain)

Approving Official:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Signature:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date:\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**HHS Emergency Purchase Log for Cardholders/Checkwriters**

**Emergency Name: Single Purchase Limit:**

**Cardholder: Last 4 digits of account:**

**OPDIV: Office:**

***Instructions:*** Complete an entry in this log for each purchase made
with a card or convenience check in support of any of the following
emergencies: A public health emergency declared under 42 U.S.C. 247d; a
defense against or recovery from a nuclear, biological, chemical, or
radiological attack under FAR 13.201(g); or a major disaster under the
Stafford Act 42 U.S.C. 5121. Indicate who received the product or
service if other than the cardholder.

+-----+-----+--------+-----------------+-----------------+-----------+
| D   | Amo | Vendor | Description of  | Received by:    | Purchase  |
| ate | unt |        | Product or      |                 | Method    |
| Pur |     |        | Service         |                 |           |
| cha |     |        |                 |                 |           |
| sed |     |        |                 |                 |           |
+=====+=====+========+=================+=================+===========+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+
|     | **\ |        |                 | **Cardholder**  |           |
|     | $** |        |                 |                 | *         |
|     |     |        |                 | **Other         | *Purchase |
|     |     |        |                 | (specify)**     | Card**    |
|     |     |        |                 |                 |           |
|     |     |        |                 |                 | **Co      |
|     |     |        |                 |                 | nvenience |
|     |     |        |                 |                 | Check**   |
+-----+-----+--------+-----------------+-----------------+-----------+

**HHS Purchase Card Program**

**Approving Official Semi-annual Review of Convenience Check Use**

**[Instructions]{.underline}:** Complete a separate form for each
convenience check account under your purview and e-mail to your A/OPC.

Review Period:       to      

Convenience Check Account No:      

Total checks issued during review period:      Total Amount:      

Total number of checks issued for the following reasons (total must
equal above number):

> Issued to individual with no merchant account     
>
> Issued to participant in medical study or trial     
>
> Issued to business that does not accept charge cards, and no other
> source exists     
>
> Issued to Indian tribe or affiliate     
>
> Issued to merchant in the field where no other source is
> geographically available     
>
> Issued to merchant in underdeveloped country     
>
> Issued to merchant under emergency conditions     
>
> Other (number written and description):           

Were any checks written for more than \$3,000 by non-contracting
personnel?

> No Yes (number written and description):           

Were any checks written to "Cash"?

> No Yes (number written and description):           

Were any checks written to another HHS or Federal employee?

> No Yes (number written description):           

Summarize instances of convenience check misuse or fraud:

     

If no checks were issued under the account during the review period,
indicate one of the following:

> Convenience checks no longer required for this account
>
> Convenience checks are still required. Justification for continued
> need:      

Approving Official:      

Organization:      

Telephone:      

E-mail:      

Date of Review:      

**HHS Purchase Card Program**

**A/OPC Semi-annual Review of Convenience Check Use**

**[Instructions]{.underline}:** Complete this summary of convenience
check use in your OPDIV and e-mail to the HHS Purchase Card Coordinator
at ASAM/OAMP.

Review Period:       to      

OPDIV:

Convenience check accounts at start of period:     

Convenience check accounts cancelled:     

Convenience check accounts added:     

Convenience check accounts at end of period:     

Total checks issued during review period:      Total Amount:      

Total number of checks issued for the following reasons (total must
equal above number):

> Issued to individual with no merchant account     
>
> Issued to participant in medical study or trial     
>
> Issued to business that does not accept charge cards, and no other
> source exists     
>
> Issued to Indian tribe or affiliate     
>
> Issued to merchant in the field where no other source is
> geographically available     
>
> Issued to merchant in underdeveloped country     
>
> Issued to merchant under emergency conditions     
>
> Other (number written and description):           

Convenience check accounts to be cancelled as a result of this review:
    

Summarize instances of misuse or fraud involving convenience checks
uncovered during the review period, and the corrective actions taken:

> Any checks written for more than \$3,000 by non-contracting personnel?
>
> No Yes (number written and description):           
>
> Any checks written to "Cash"?
>
> No Yes (number written and description):           
>
> Any checks written to another HHS or Federal employee?
>
> No Yes (number written and description):           
>
> Summarize any other instances of convenience check misuse or fraud:
>
>      

A/OPC:      

Telephone:      

E-mail:      

Date of Review:      

**HHS Purchase Card Program**

**OPDIV Annual Report of Program Performance**

**[Instructions:]{.underline}** This annual report of OPDIV purchase
card program performance during the previous fiscal year is required in
accordance with the HHS Purchase Card Guide IV.C.5., Reviews,
Surveillance, and Reporting. The OPDIV A/OPC, or designee, shall
complete this template and submit it to the HHS Purchase Card Program
Coordinator in HHS/ASAM/OAMP by October 31 of the current year.

Fiscal Year: Date Prepared M/D/YY:       OPDIV:

Prepared by:      

In the table below, indicate the number of program personnel and
transactions that were reviewed, and the percentage of each category
that the number represents. Include in the checkwriter totals
individuals who also had purchase cards and were counted in the
cardholder review total.

  ----------------------- ----------------------- -----------------------
  Review Summary                                  

  **Persons and Trans.    **Number Reviewed**     **Percentage of Total**
  Reviewed**                                      

  **Cardholders**         **    **                **   %**

  **Checkwriters**        **    **                **   %**

  **AOs**                 **    **                **   %**

  **Purchase Card         **     **               **   %**
  Transactions**                                  

  **Convenience Check     **     **               **   %**
  Transactions**                                  
  ----------------------- ----------------------- -----------------------

Indicate the method(s) used to conduct the reviews. Check as many as
apply.

Statistical random sampling Judgmental sampling Spot checks

100% inspection Other (describe):

Indicate the findings in the table below.

  ----------------------------------------------- ---------------- ------------
  Findings: Card/Check Misuse                                      

  **Description**                                 **Observed\***   **Number**

  **Purchasing prohibited products or services**                   **    **

  **Failure to obtain clearances for Appendix D                    **    **
  purchases when required**                                        

  **Failure to purchase from required sources**                    **    **

  **Inadequate documentation of purchases**                        **    **

  **Untimely reconciliation of purchase                            **    **
  transactions with bank statement**                               

  **Purchase not for a bona fide need**                            **    **

  **Failure to obtain pre-approval of purchase**                   **    **

  **Exceeding purchase authority levels**                          **    **

  **Failure to resolve/escalate merchant                           **    **
  disputes**                                                       

  **Procedural errors/mistakes other than                          **    **
  listed**                                                         

  **Training not in accordance with HHS                            **    **
  requirements**                                                   

  **Approval of improper purchases**                               **    **

  **Untimely review/approval of cardholder                         **    **
  purchases**                                                      

  **Improper use of convenience checks**                           **    **

  **Other(s) (describe):      **                                   **    **
  ----------------------------------------------- ---------------- ------------

Summarize any patterns, problem areas, and corrective and/or
disciplinary actions taken in response to the review findings identified
in the table above:

     

How many instances of suspected or actual fraud were uncovered?    For
each instance, summarize the details of the incident and describe the
planned or actual actions taken in response.

     

Describe any problems or issues with management and use of purchase
cards and/or convenience checks that require input or assistance from
ASAM/OAMP.

     

Describe any exceptional performance or best practices within your OPDIV
with respect to the HHS purchase card program.

     

Provide any recommendations for improving the HHS purchase card program.

     

# Appendix C. Prohibited Purchases {#appendix-c.-prohibited-purchases .unnumbered}

The products and services in the table below are prohibited purchases
when using the purchase card. The prohibited products and services are
applicable to non-contracting cardholders. Contracting personnel who
have been issued cards may use them in accordance with their contracting
authority, OPDIV contract office procedures, and contractual terms and
conditions, subject to Appropriations laws and Federal and HHS
Acquisition Regulations.

  -----------------------------------------------------------------------
  Product or Service
  -----------------------------------------------------------------------
  **Airline tickets**

  **Automobiles, including gasoline and repairs**

  **Backordered items ([See
  III.A.11](#ensure-merchant-bills-only-upon-shipment))**

  **Bail or bond payments**

  **Cash advances**

  **Casino, racetrack, lottery, or other betting or gambling expenses**

  **Dating and escort services**

  **Fines or penalties**

  **Fuel for vehicles (fuel for generators, heaters, etc. is permitted)**

  **Lobbying or other political contributions**

  **Luxury items (Items must meet the Government's minimum needs only.)**

  **Decorations for individual offices or personal use (art items,
  photos, plants and flowers, etc.)**

  **Personal items (Items for personal use, convenience, or consumption.
  See Appendix D for ergonomically or medically necessary items)**

  **Products that do not meet a bona fide need of the Department ([See
  III.A.4](#_Adequate_Funding?))**

  **Rental or lease of motor vehicles, buildings, or land**

  **Savings bonds**

  **Services that do not meet a bona fide need of the Department ([See
  III.A.4](#_Adequate_Funding?))**

  **Tax (See [III.A.9](#_Tax_Added_by_Merchant?) for treatment of tax and
  exceptions)**

  **Telephone calls or calling cards**

  **Travel or travel-related expenses (hotels, airline, bus & train
  fares, meals, entertainment)**

  **Weapons**

  **Vehicles**
  -----------------------------------------------------------------------

# Appendix D. Purchases Requiring Special Attention {#appendix-d.-purchases-requiring-special-attention .unnumbered}

The products and services in the table below have certain restrictions
on purchases when using the card. Card purchases are permitted under the
HHS Purchase Card Program provided the cardholder follows the
conditions/restrictions in the Remarks column. The products and services
requiring special attention are applicable to non-contracting
cardholders. Contracting personnel who have been issued cards may use
them in accordance with their contracting authority, OPDIV contract
office procedures, and contractual terms and conditions, subject to
Appropriations law and Federal and HHS Acquisition Regulations.

+--------------------------------+-------------------------------------+
| Product or Service             | Remarks                             |
+================================+=====================================+
| **Advance payments to          | **Generally prohibited. Paying in   |
| merchants (where merchants     | advance for products that must be   |
| process charges against the    | backordered by the merchant is      |
| card for a product or service  | prohibited.**                       |
| and the Government pays the    |                                     |
| bank's invoice before          | **For services, Bank regulations    |
| receiving the product or       | allow a merchant to process a       |
| before the service is          | charge against the cardholder's     |
| completed)**                   | account upon initiating the         |
|                                | service. However, the service       |
|                                | should be completed by the time HHS |
|                                | pays the bank invoice in order to   |
|                                | avoid an advance payment situation, |
|                                | and to preserve the Government's    |
|                                | rights under the dispute            |
|                                | provisions. Exceptions include      |
|                                | subscriptions, public service       |
|                                | announcements, print media ads, and |
|                                | conference registrations where      |
|                                | paying in advance is the industry   |
|                                | standard business practice and the  |
|                                | only way to obtain the service.**   |
|                                |                                     |
|                                | **A service that extends into       |
|                                | future billing periods may be paid  |
|                                | incrementally using the card,       |
|                                | provided that the total value of    |
|                                | the service is within the           |
|                                | cardholder's single purchase limit. |
|                                | An order for a service may not be   |
|                                | split into smaller orders to avoid  |
|                                | the cardholder's purchase limit.**  |
+--------------------------------+-------------------------------------+
| **Advertisements**             | **Advertisements for job            |
|                                | announcements are permitted if      |
|                                | approved by the OPDIV Human         |
|                                | Resources Office, or other OPDIV    |
|                                | organization per OPDIV procedures.  |
|                                | Other advertisements are permitted  |
|                                | if OPDIV has statutory authority    |
|                                | and pre-approval granted.**         |
+--------------------------------+-------------------------------------+
| **Architect/Engineering        | **Must be \$2,000 or less and       |
| services**                     | simple enough to describe verbally  |
|                                | and without drawings or             |
|                                | specifications.** **OPDIV           |
|                                | procedures may require a clearance  |
|                                | or pre-approval.**                  |
+--------------------------------+-------------------------------------+
| **Audio-visual services**      | **OPDIV procedures may require a    |
|                                | clearance or pre-approval. For      |
|                                | audio-visual services intended for  |
|                                | public release, HHS public affairs  |
|                                | reviews and clearances must be      |
|                                | obtained in accordance with OPDIV   |
|                                | procedures.**                       |
+--------------------------------+-------------------------------------+
| **Awards and award             | **Non-cash awards, certificates,    |
| ceremonies**                   | plaques, etc. are permitted. See    |
|                                | "Gift cards and gift certificates"  |
|                                | for related policy. Expenses        |
|                                | associated with award ceremonies    |
|                                | are permitted under OPDIV Human     |
|                                | Resource Office guidelines.**       |
+--------------------------------+-------------------------------------+
| **Bottled water**              | **Generally prohibited unless OSHA, |
|                                | a local water authority, or an      |
|                                | authorized OPDIV organization has   |
|                                | declared the water in your location |
|                                | to be unsafe, or if required to     |
|                                | protect life or property. The       |
|                                | cardholder must document the        |
|                                | authority in their purchase card    |
|                                | file.**                             |
|                                |                                     |
|                                | **For policy and exceptions, see    |
|                                | HHS Memo dated Oct 12, 2004,        |
|                                | subject *Purchase of Food for       |
|                                | Government Employees*; and HHS Memo |
|                                | dated July 26, 2005, subject        |
|                                | *Departmental Policy on Use of      |
|                                | Appropriated Funds for Food at      |
|                                | HHS-Sponsored Conferences.***       |
|                                |                                     |
|                                | **See OPDIV guidance for approval   |
|                                | procedures for exceptions.**        |
+--------------------------------+-------------------------------------+
| **Business cards**             | **Permitted, but must follow OPDIV  |
|                                | guidance and ordering procedures.   |
|                                | Must use AbilityOne (formerly       |
|                                | JWOD)-approved source(s) to         |
|                                | purchase business cards. Currently, |
|                                | the only approved source is the     |
|                                | Seattle Lighthouse for the Blind,   |
|                                | <http://www                         |
|                                | .lighthousestore.org/bc_main.html>, |
|                                | 1-800-799-0402.**                   |
+--------------------------------+-------------------------------------+
| **Camcorders/video cameras**   | **OPDIV procedures may require a    |
|                                | clearance or pre-approval.**        |
+--------------------------------+-------------------------------------+
| **Clothing**                   | **Not permitted except under the    |
|                                | following conditions:**             |
|                                |                                     |
|                                | -   **Not ordinary or usual for     |
|                                |     duties**                        |
|                                |                                     |
|                                | -   **Necessary for safe and        |
|                                |     successful work performance**   |
|                                |                                     |
|                                | -   **This item is used for         |
|                                |     hazardous duty**                |
|                                |                                     |
|                                | -   **The item is an approved       |
|                                |     uniform**                       |
|                                |                                     |
|                                | -   **Item is required under OSHA** |
+--------------------------------+-------------------------------------+
| **Conference services (Events  | **If conference is considered       |
| management)**                  | training, requires pre-approval per |
|                                | OPDIV procedures. Must use the HHS  |
|                                | Strategic Sourcing BPA for Events   |
|                                | Management or submit waiver.**      |
+--------------------------------+-------------------------------------+
| **Combined Federal Campaign    | **Limited to \$3,000 per            |
| support**                      | transaction. Only items of nominal  |
|                                | value (e.g., coffee mugs, key       |
|                                | chains, etc.) are permitted to be   |
|                                | purchased for specific              |
|                                | individuals/groups (e.g.,           |
|                                | keyworkers, higher contributors).   |
|                                | In addition, any refreshments or    |
|                                | snacks purchased for CFC events     |
|                                | (such as "kickoff meetings") must   |
|                                | be simple in nature (e.g. coffee,   |
|                                | soda, cookies, chips). Deluxe food  |
|                                | purchases, such as roast beef,      |
|                                | shrimp, etc., are not allowable.**  |
|                                |                                     |
|                                | **CFC purchases must not be split   |
|                                | to allow the purchase card to be    |
|                                | used. CFC requirements that exceed  |
|                                | \$3,000 must be obtained through    |
|                                | the OPDIV contracting office.**     |
+--------------------------------+-------------------------------------+
| **Computers (laptop and        | **OPDIV procedures may require      |
| desktop)**                     | clearance or pre-approval by OPDIV  |
|                                | Chief Information Officer (CIO)     |
|                                | Office. Follow OPDIV property       |
|                                | management procedures.**            |
+--------------------------------+-------------------------------------+
| **Computer-related items,      | **OPDIV procedures may require      |
| PDAs, peripherals, cables,     | clearance or pre-approval by OPDIV  |
| cards, toner and ink           | Chief Information Officer (CIO)     |
| cartridges, software, software | Office. Must use the HHS Strategic  |
| upgrades, repair services,     | Sourcing BPA or submit waiver.**    |
| licenses, etc.**               |                                     |
+--------------------------------+-------------------------------------+
| **Construction services**      | **Must be \$2,000 or less and       |
|                                | simple enough to describe verbally  |
|                                | and without drawings or             |
|                                | specifications. OPDIV procedures    |
|                                | may require a clearance or          |
|                                | pre-approval.**                     |
+--------------------------------+-------------------------------------+
| **Consultant services**        | **May use the card or convenience   |
|                                | checks to pay for the consultant's  |
|                                | fee. If travel costs                |
|                                | (transportation, lodging, meals,    |
|                                | etc.) appear as a separate line     |
|                                | item on the consultant's bill, the  |
|                                | purchase card or convenience checks |
|                                | cannot be used to pay for the       |
|                                | travel costs. Document all charges  |
|                                | in the purchase card file.**        |
+--------------------------------+-------------------------------------+
| **Decorations for common areas | **Permitted if authorized per OPDIV |
| (art items, photos, plants and | procedures.**                       |
| flowers, etc.)**               |                                     |
+--------------------------------+-------------------------------------+
| **Entertainment, including     | **Not permitted unless excepted by  |
| food, drink, meals, alcoholic  | statute.**                          |
| beverages, banquets, music,    |                                     |
| and recreational facilities**  |                                     |
+--------------------------------+-------------------------------------+
| **Ergonomic and medical        | **OPDIV procedures may require a    |
| purchases (footrests,          | clearance or pre-approval.**        |
| backrests, wrist supports,     |                                     |
| special chairs, lighting,      |                                     |
| etc.)**                        |                                     |
+--------------------------------+-------------------------------------+
| **Equipment maintenance and    | **See "Maintenance and service      |
| service agreements**           | agreements" and "Recurring          |
|                                | requirements for products and       |
|                                | services"**                         |
+--------------------------------+-------------------------------------+
| **Existing contracts**         | **The card cannot be used to        |
|                                | purchase products or services under |
|                                | existing contracts unless the       |
|                                | contract specifically allows use of |
|                                | the card for ordering purposes. If  |
|                                | use of the card is permitted under  |
|                                | the contract, orders must fall      |
|                                | within the cardholder's purchase    |
|                                | limits, and must not be split into  |
|                                | two or more orders.**               |
+--------------------------------+-------------------------------------+
| **Food**                       | **Food purchases are generally      |
|                                | prohibited. For policy and          |
|                                | exceptions, see ASAM's memo dated   |
|                                | June 12, 2007, subject: *HHS Policy |
|                                | on the Purchase of Food with        |
|                                | Appropriated Funds.***              |
|                                |                                     |
|                                | **See OPDIV guidance for approval   |
|                                | procedures for exceptions.**        |
+--------------------------------+-------------------------------------+
| **Frames and framing**         | **May not be purchased for personal |
|                                | items, such as photos, training     |
|                                | certificates, etc. Framing for      |
|                                | common areas or authorized awards   |
|                                | are permitted.**                    |
+--------------------------------+-------------------------------------+
| **Furniture and furniture      | **OPDIV procedures may require a    |
| components**                   | clearance or pre-approval.**        |
+--------------------------------+-------------------------------------+
| **Gifts cards and gift         | **Permitted for employee awards and |
| certificates**                 | award ceremonies in accordance with |
|                                | Office of Personnel Management and  |
|                                | HHS Human Resource Office policy.** |
|                                |                                     |
|                                | **The purchase of gift              |
|                                | cards/certificates for employee     |
|                                | awards is subject to the following  |
|                                | limitations:**                      |
|                                |                                     |
|                                | -   **The OPDIV must have a formal  |
|                                |     awards and recognition policy   |
|                                |     that authorizes the use of gift |
|                                |     cards or certificates**         |
|                                |                                     |
|                                | -   **At a minimum, the OPDIV       |
|                                |     policy for gift                 |
|                                |     cards/certificates must include |
|                                |     procedures to record and track  |
|                                |     the purchase and issuance of    |
|                                |     all gift cards and              |
|                                |     certificates**                  |
|                                |                                     |
|                                | **The purchase card may also be     |
|                                | used, in accordance with OPDIV      |
|                                | procedures, to purchase gift cards  |
|                                | and certificates as honoraria for   |
|                                | private sector personnel who        |
|                                | provide speeches, lectures, serve   |
|                                | as panel members, etc., at HHS      |
|                                | functions.**                        |
+--------------------------------+-------------------------------------+
| **Hazardous materials or       | **OPDIV procedures may require a    |
| controlled substances**        | clearance or pre-approval.**        |
+--------------------------------+-------------------------------------+
| **Internet service**           | **OPDIV procedures may require a    |
|                                | clearance or pre-approval by the    |
|                                | OPDIV Chief Information Officer     |
|                                | (CIO) Office**                      |
+--------------------------------+-------------------------------------+
| **License fees for employees** | **See membership/license fees       |
|                                | below.**                            |
+--------------------------------+-------------------------------------+
| **Maintenance and service      | **See "Advance payments" and        |
| agreements**                   | "Recurring requirements for         |
|                                | products and services". Generally,  |
|                                | maintenance and service agreements  |
|                                | should be established by the OPDIV  |
|                                | contracting office. The total       |
|                                | estimated cost of the agreement     |
|                                | determines the authority level for  |
|                                | who may enter into such agreements, |
|                                | not the individual monthly costs.   |
|                                | Cardholders may use the card to pay |
|                                | monthly costs under maintenance     |
|                                | agreements, provided the agreement  |
|                                | allows for the use of the purchase  |
|                                | card, and amounts are within        |
|                                | cardholder limits. If maintenance   |
|                                | involves construction, payments     |
|                                | under the card are limited to a     |
|                                | maximum of \$2,000.**               |
|                                |                                     |
|                                | **All services that have been       |
|                                | billed must be completed before the |
|                                | Government pays the invoice so as   |
|                                | avoid an advance payment situation, |
|                                | and to preserve HHS' disputes       |
|                                | rights. If the services to be       |
|                                | obtained will extend into future    |
|                                | billing cycles (and the merchant    |
|                                | will not accept incremental         |
|                                | payments), the card cannot be used  |
|                                | for payment. Orders must not be     |
|                                | split.**                            |
|                                |                                     |
|                                | **See OPDIV procedures for any      |
|                                | exceptions and additional           |
|                                | guidance.**                         |
+--------------------------------+-------------------------------------+
| **Maintenance for leased       | **See "Maintenance and service      |
| facilities**                   | agreements" above.**                |
+--------------------------------+-------------------------------------+
| **Medical items**              | **See "Ergonomic and medical        |
|                                | purchases".**                       |
+--------------------------------+-------------------------------------+
| **Membership/license fees for  | **Prohibited unless permitted by    |
| employees**                    | statute or authorized for training  |
|                                | purposes.**                         |
|                                |                                     |
|                                | **See OPDIV procedures for any      |
|                                | exceptions.**                       |
+--------------------------------+-------------------------------------+
| **Meeting space/booth rental** | **Generally acceptable. If food or  |
|                                | refreshments are included in the    |
|                                | rental price, the purchase is only  |
|                                | acceptable if the conditions        |
|                                | described in ASAM's memo dated June |
|                                | 12, 2007, subject: *HHS Policy on   |
|                                | the Purchase of Food with           |
|                                | Appropriated Funds*, are met.**     |
|                                |                                     |
|                                | **For HHS-sponsored events, use the |
|                                | Events Management Strategic         |
|                                | Sourcing BPA to obtain this service |
|                                | or submit waiver.**                 |
+--------------------------------+-------------------------------------+
| **Moving services**            | **Acceptable for simple moves that  |
|                                | do not require a detailed statement |
|                                | of work. OPDIV procedures may       |
|                                | require an additional clearance or  |
|                                | pre-approval.**                     |
+--------------------------------+-------------------------------------+
| **Multiple shipments of        | **Except for subscriptions, when    |
| products**                     | the cardholder is aware that the    |
|                                | product requires delivery over      |
|                                | multiple billing periods, the card  |
|                                | cannot be used to make the          |
|                                | purchase. If the merchant elects to |
|                                | make multiple shipments without the |
|                                | cardholder's knowledge, the         |
|                                | cardholder may accept the shipments |
|                                | and document the purchase card file |
|                                | accordingly.**                      |
|                                |                                     |
|                                | **Multiple shipments from a         |
|                                | merchant under a single purchase    |
|                                | transaction are permitted if they   |
|                                | occur within the current billing    |
|                                | cycle.**                            |
+--------------------------------+-------------------------------------+
| **Orders against existing      | **See "Existing contracts".**       |
| contracts**                    |                                     |
+--------------------------------+-------------------------------------+
| **Printing and copying**       | **The card may be used to pay for   |
|                                | Government Printing Office (GPO)    |
|                                | jobs, or for commercial printing    |
|                                | jobs that are exempt from the       |
|                                | requirement to use the GPO.**       |
|                                |                                     |
|                                | **Per Federal Acquisition           |
|                                | Regulation Subpart 8.8, all         |
|                                | government printing must be done by |
|                                | the Government Printing Office      |
|                                | except when:**                      |
|                                |                                     |
|                                | -   **GPO cannot provide the        |
|                                |     printing service**              |
|                                |                                     |
|                                | -   **Printing is done in field     |
|                                |     plants operated by an executive |
|                                |     agency**                        |
|                                |                                     |
|                                | -   **Printing is acquired by an    |
|                                |     executive agency from           |
|                                |     allotments for contract field   |
|                                |     printing**                      |
|                                |                                     |
|                                | -   **The printing is specifically  |
|                                |     authorized by statute to be     |
|                                |     done other than by the GPO.**   |
|                                |                                     |
|                                | **NIH, AHRQ, and IHS are accepted   |
|                                | by statute from the requirement to  |
|                                | use the GPO for printing. For IHS,  |
|                                | the exception only applies if the   |
|                                | printing is purchased from an       |
|                                | Indian (Native American) firm.**    |
|                                |                                     |
|                                | **Cardholders in OPDIVs other than  |
|                                | NIH, AHRQ, and IHS must obtain      |
|                                | printing from the GPO unless one of |
|                                | the above exceptions applies. To    |
|                                | determine whether one of the above  |
|                                | exceptions applies, and for waivers |
|                                | or exceptions to this policy,       |
|                                | contact the HHS printing authority  |
|                                | (Office of the Chief Information    |
|                                | Officer, HHS/ASRT, (202)            |
|                                | 690-5530).**                        |
+--------------------------------+-------------------------------------+
| **Promotional items (buttons,  | **Prohibited, unless permitted by   |
| mugs, balloons, etc.)**        | the OPDIV's statute to further      |
|                                | program objectives. See "Combined   |
|                                | Federal Campaign support".**        |
|                                |                                     |
|                                | **See OPDIV procedures for          |
|                                | guidance.**                         |
+--------------------------------+-------------------------------------+
| **Recurring requirements for   | **The card may be used to pay for   |
| products and services**        | recurring requirements for products |
|                                | and services on a monthly or        |
|                                | as-needed basis, except as          |
|                                | follows:**                          |
|                                |                                     |
|                                | **Recurring requirements for        |
|                                | products or services that are       |
|                                | expected to exceed the              |
|                                | micropurchase threshold over a 12   |
|                                | month period, and are not already   |
|                                | covered by an existing BPA,         |
|                                | strategic sourcing contract, or     |
|                                | other ordering arrangement, must be |
|                                | processed by the OPDIV contracting  |
|                                | office in order to obtain greater   |
|                                | efficiency and negotiate terms,     |
|                                | conditions, and savings. For        |
|                                | example, if a service is required   |
|                                | every month and the annual total    |
|                                | will exceed the micropurchase       |
|                                | threshold, an overall service       |
|                                | agreement should be negotiated and  |
|                                | awarded by the OPDIV contracting    |
|                                | office in lieu of purchasing the    |
|                                | service on a stand-alone basis each |
|                                | month. The card may be used to pay  |
|                                | for monthly services under an       |
|                                | overall service agreement, if       |
|                                | provided for in the agreement and   |
|                                | within the cardholder's purchase    |
|                                | limits.**                           |
|                                |                                     |
|                                | **See OPDIV guidance for any        |
|                                | exceptions.**                       |
+--------------------------------+-------------------------------------+
| **Repair services**            | **Acceptable, unless repairs are    |
|                                | already covered by an existing      |
|                                | warranty or maintenance             |
|                                | agreement.**                        |
+--------------------------------+-------------------------------------+
| **Services (various)**         | **The micropurchase threshold for   |
|                                | most services is \$2,500. The       |
|                                | service must be simple enough to be |
|                                | described verbally, not require     |
|                                | detailed specifications, and not    |
|                                | involve paying up-front for work to |
|                                | be completed in future billing      |
|                                | cycles.**                           |
|                                |                                     |
|                                | **The micropurchase threshold is    |
|                                | \$3,000 for the following services: |
|                                | :**                                 |
|                                |                                     |
|                                | -   **Transportation services       |
|                                |     covered by published tariff     |
|                                |     rates**                         |
|                                |                                     |
|                                | -   **Telephone/telecommunications  |
|                                |     services (Telephone calls and   |
|                                |     calling cards are prohibited    |
|                                |     per Appendix C)**               |
|                                |                                     |
|                                | -   **Public utility services**     |
|                                |                                     |
|                                | -   **Employment contracts          |
|                                |     providing for direct services   |
|                                |     to a Federal agency by an       |
|                                |     individual or individuals**     |
+--------------------------------+-------------------------------------+
| **Subscriptions**              | **The card may be used to purchase  |
|                                | subscriptions to magazines,         |
|                                | journals, technical data, etc. Up   |
|                                | to three years may be purchased if  |
|                                | costs are favorable compared to     |
|                                | yearly subscriptions.**             |
|                                |                                     |
|                                | **Cardholders should ensure that a  |
|                                | subscription does not automatically |
|                                | renew after expiration and continue |
|                                | to charge their card. Cardholders   |
|                                | should notify AOs and A/OPCs of     |
|                                | ongoing subscriptions when leaving  |
|                                | or transferring so that the         |
|                                | subscription may be cancelled or    |
|                                | transferred to another account as   |
|                                | appropriate.**                      |
+--------------------------------+-------------------------------------+
| **Telecommunications           | **OPDIV procedures may require      |
| equipment**                    | clearance or pre-approval by the    |
|                                | OPDIV Chief Information Officer     |
|                                | (CIO) Office.**                     |
+--------------------------------+-------------------------------------+
| **Telephone/telecommunications | **OPDIV procedures may require a    |
| services**                     | clearance or pre-approval.**        |
+--------------------------------+-------------------------------------+
| **Training**                   | **Permitted for FTEs only. OPDIV    |
|                                | procedures may require a clearance  |
|                                | or pre-approval.**                  |
+--------------------------------+-------------------------------------+

# Appendix E. Purchase Card Reviews and Reports {#appendix-e.-purchase-card-reviews-and-reports .unnumbered}

The information shown on the following pages of this appendix summarizes
the internal and external reviews and reports that are conducted under
the HHS Purchase Card Program. Also listed are the key bank reports that
A/OPCs use to monitor program performance.

  ------------------------------------------------------------------------------------------------------
  Report/Reviews    Prepared By      Submitted to    Due Date(s)      Summary of       Purpose
                                                                      Content          
  ----------------- ---------------- --------------- ---------------- ---------------- -----------------
  EXTERNAL REPORTS                                                                     

  **HHS' Charge     **HHS' Purchase  **OMB/GSA**     **January 31     **HHS' Policies  **Assessment to
  Card Management   Card                             each year**      and Procedures   determine if
  Plan**            Coordinator**                                     for              adequate controls
                                                                      Implementation   are in place to
                                                                      of the Smart-Pay minimize the risk
                                                                      Purchase Card    of card fraud,
                                                                      Program.**       misuse and
                                                                                       abuse.**

  **HHS Purchase    **HHS' Purchase  **OMB/GSA**     **Quarterly, no  **Total          **Assessment of
  Card Spending     Card                             later than 45    open/closed      performance
  Statistics**      Coordinator**                    days at the end  accounts,        trends in
                                                     of each calendar cardholder       managing cost and
                                                     quarter**        spending limits, efforts to
                                                                      purchase card    minimize risk of
                                                                      dollars spent,   fraud and
                                                                      rebates earned,  abuse.**
                                                                      disciplinary     
                                                                      and/or fraud     
                                                                      cases            
                                                                      reported.**      

  INTERNAL                                                                             
  REVIEWS/REPORTS                                                                      

  **OPDIV Purchase  **HHS' Purchase  **DASAMP**      **December 31    **Review         **Assessment of
  Card Program      Card                             each year**      findings         OPDIV compliance
  Compliance        Coordinator**                                     including        with standard
  Review**                                                            strengths and    guidelines for
                                                                      weaknesses, and  implementation of
                                                                      best practices   HHS Purchase Card
                                                                      for improving    Program.**
                                                                      purchase card    
                                                                      program          
                                                                      management.**    

  **OPDIV Annual    **A/OPC**        **HHS' Purchase **October 31     **Summary of     **Assessment of
  Report of Program                  Card            each year**      transactions     AO's compliance
  Performance**                      Coordinator**                    reviewed for     with guidelines
                                                                      compliance with  for approving
                                                                      federal and      cardholders'
                                                                      department       transactions.**
                                                                      policy.**        

  **Inactive and    **A/OPC**        **HHS' Purchase **April 30 and   **Date card was  **Absent a
  Emergency                          Card            October 31 each  last used,       suitable
  Purchase Card                      Coordinator**   year**           Justification to justification,
  Review**                                                            retain card,     ensure timely
                                                                      affirmation to   cancellation of
                                                                      cancel card. If  inactive purchase
                                                                      an emergency     cards or
                                                                      card,            unnecessary
                                                                      verification     emergency cards.
                                                                      that cardholder  Assessment of
                                                                      exists, has      OPDIV compliance
                                                                      possession of    with guidelines
                                                                      card, and is     for designating
                                                                      still designated emergency
                                                                      as an emergency  cards.**
                                                                      employee or      
                                                                      member of the    
                                                                      Commissioned     
                                                                      Corps.**         

  **HHS OIG Reviews **HHS OIG**      **A/OPCs;\      **Ongoing**      **Summary of     **Determine
  of HHS Purchase                    HHS' Purchase                    review findings, compliance with
  Card                               Card                             including        applicable laws,
  Transactions**                     Coordinator**                    identification   regulations,
                                                                      of cases of      policies, and
                                                                      suspected fraud  procedures.
                                                                      or misuse.**     Identify any
                                                                                       cases of
                                                                                       suspected fraud
                                                                                       or misuse.**

  **Convenience     **A/OPC**        **HHS' Purchase **June 30 and    **Number of      **Assess
  Check Use                          Card            December 31 each checking         compliance with
  Review**                           Coordinator**   year**           accounts         guidelines for
                                                                      reviewed and the using convenience
                                                                      factors used for checks.**
                                                                      conducting the   
                                                                      review and the   
                                                                      review results** 

  **Pre-approval of **A/OPC**        **OAMP**        **Periodically   **Number of      **Assess
  Purchase                                           requested by     cardholders      compliance with
  Requirement**                                      OAMP**           reviewed and the policies for
                                                                      transactions,    pre-approval of
                                                                      factors used for 100% of purchases
                                                                      conducting the   made under HHS
                                                                      review, and the  Purchase Card
                                                                      review results** Program.**

  ACCOUNT                                                                              
  RECONCILATIONS                                                                       

  **Reconciling     **Cardholder**   **Approval      **Monthly**      **Electronic log **Verification of
  Monthly                            Official**                       of transactions  purchases charged
  Purchases**                                                         matched to       to an individual
                                                                      accounting       account.**
                                                                      codes.**         

  **Approving       **A/OPC**        **HHS' Purchase **Periodically   **Summary of     **Assessment of
  Official Account                   Card            requested by     account          AO's compliance
  Reviews**                          Coordinator**   OAMP**           reconciliation   with requirements
                                                                      compliance.**    to review 100% of
                                                                                       transactions for
                                                                                       compliance with
                                                                                       federal and
                                                                                       department
                                                                                       policies.**

  **Delinquency     **Service Bank** **A/OPC**       **31 days past   **Accounts       **Minimize risk
  Report**                                           the payment due  having           of penalties
                                                     date**           undisputed       imposed for
                                                                      amounts past     untimely
                                                                      due.**           payments.**

  **Pre-approval of **A/OPC**        **OAMP**        **Periodically   **Summary of     **Assess
  Purchase                                           requested by     pre-approval     compliance with
  Requirement**                                      OAMP**           compliance.**    policies for
                                                                                       pre-approval of
                                                                                       100% of purchases
                                                                                       made under HHS
                                                                                       Purchase Card
                                                                                       Program.**

  **Refund          **HHS' Contract  **OAMP**        **Annually, not  **Summary of     **Review required
  Agreement         Activity**                       later than       discussions with determining if a
  Review**                                           October 31**     contractor for   more competitive
                                                                      maximizing       deal is
                                                                      refunds earned   obtainable for
                                                                      for charge card  earning
                                                                      usage.**         rebates.**
  ------------------------------------------------------------------------------------------------------

  -----------------------------------------------------------------------
  KEY U.S. BANK                                
  INTERNAL CONTROL                             
  REPORTS                                      
  --------------------- ---------------------- --------------------------
  Report Title          Report Description     Report Use

  Program Management --                        
  The reports in this                          
  category are used for                        
  conducting general                           
  program management                           
  activities                                   

  **Account List        **Comprehensive list   **Used to identify and
  Report**              of cardholders and     make decisions about
                        approval officials in  accounts in the program,
                        HHS program, including for example canceling
                        open date, last        unused cards, adjusting
                        transaction date,      limits, audit training and
                        single purchase limit  pre-approval
                        and credit limit**     requirements.**

  **Account Spend       **Summary of account   **Used to monitor
  Analysis Report**     spending**             cardholder spending**

  **Account Status      **Lists accounts with  **Used to discover and
  Change Report**       change status of       address trends in purchase
                        lost/stolen, closed or card usage**
                        open**                 

  **Transactions        **Summary of           **Used to review details
  Approval Status --    transactions approvals of individual cardholder
  Summary Report**      by cardholder**        approvals**

  Program Compliance --                        
  The reports in this                          
  category are used for                        
  conducting oversight                         
  and surveillance                             
  activities                                   

  **Accounts with High  **List of accounts     **Used to help identify
  Credit Limits         that have maximum      cardholders who may need
  Report**              credit limits over a   additional training or
                        specified amount**     higher warrants**

  **Accounts with       **List accounts often  **Used to help spot
  multiple lost/stolen  have cards replaced**  possible instances of card
  cards**                                      fraud**

  **Accounts with       **List of accounts     **Used to help spot
  underutilized credit  that shows cardholder  accounts that need
  limits**              spend against maximum  adjustments in credit
                        credit limit**         limits**

  **Merchant Category   **List merchants       **Used to gain an overall
  Codes**               category codes         picture of merchants
                        assigned to cardholder available to cardholders**
                        accounts**             

  **Convenience Check   **List all convenience **Used to help identify
  Transaction Report**  checks transactions**  trends in convenience
                                               check used and audit
                                               compliance with
                                               pre-approval requirements
                                               for using convenience
                                               check**

  **Authorization       **List transactions    **Used to help identify
  Mismatch Repot**      for which              transactions for possible
                        authorization amount   card abuse**
                        approved does not      
                        match final            
                        transaction amount**   

  **High cardholder     **List cardholder      **Used to help identify
  Spending by           accounts with high     possible instances of
  Merchant**            level spending with a  cardholder collusion with
                        specific merchant**    a certain vendor to spot
                                               possible instances of
                                               fraud**

  **Large Dollar        **List transactions    **Used to help identify
  Transactions**        that are over a        purchases that may not be
                        specified purchase     appropriate for the
                        limits**               purchase card program**

  **Over limit          **List convenience     **Used to help identify
  convenience check     check transactions     possible instances of
  transactions**        over a specified       check misuse**
                        amount**               

  **Potential Split     **List cardholders     **Used to help identify
  Requirement Review    associated with the    possible instances of
  Report**              same account, having   cardholder splitting
                        multiple transactions  transactions to avoid
                        with the same vendor   competition requirements**
                        that total a specified 
                        amount over a number   
                        of days**              

  **Transactions at     **List transactions at **Used to help identify
  Block MCCs Report**   Merchant Category      possible instances of card
                        Codes that have been   misuse or fraud**
                        blocked**              

  **Transaction         **List transactions    **Used to identify
  Declined Report**     declined at point of   possible instances of card
                        sale**                 misuse and needs for
                                               training**

  **Unusual Spending    **List transactions    **Used to spot possible
  Activity Report**     approved during        card misuse**
                        abnormal working       
                        hours**                

  Financial Management                         
  -- Reports in this                           
  category are used to                         
  monitor expenditures,                        
  variances, account                           
  allocations, and                             
  delinquencies                                

  **Account Allocation  **Summary of           **Used to identify
  Report**              allocations by         cardholder account by
                        accounting codes**     account and monitor
                                               spending by accounting
                                               codes**

  **Billed Transaction  **Summary of billed    **Used to match
  and Order Detail      transaction            transactions to billing
  Report**              information**          statements**

  **Transaction                                
  Approval Status                              
  Report**                                     

  **Transactions Detail **Detailed             **Used to match spending
  Summary Report**      transactions data      by accounting codes**
                        including merchant     
                        detail and accounting  
                        codes**                

  **Past Due Report**   **List accounts that   **Used to assess OPDIV
                        are past due and       compliance with policy for
                        number of times past   timely payments**
                        due situations have    
                        occurred**             

  **Sales and Use Tax** **Summary of           **Used to assess OPDIV
                        transactions and taxes compliance with policy for
                        paid**                 recovering taxes paid on
                                               government purchases**

  **Compliance                                 
  Management -- Reports                        
  in this category are                         
  used for regulatory                          
  compliance                                   
  reporting**                                  

  **Vendor Summary for  **Summary of           **Used to assist Finance
  Form 1099-MISC**      expenditure and vendor in reporting payments
                        profile information    issued using checks**
                        for Form 1099          
                        reporting**            

  **Vendor Summary by   **Summary and details  **Used for reporting
  Socio-Economic        of expenditures that   purchase card spending by
  Indicator**           have occurred with     socio-economic category**
                        vendors classified as  
                        minority (minority,    
                        women-owned, veterans, 
                        small business)**      
  -----------------------------------------------------------------------

# Appendix F. Purchase Card Review Checklist {#appendix-f.-purchase-card-review-checklist .unnumbered}

Date:

Reviewee Name:

Reviewee's role: □ Cardholder/Checkwriter □ Approving Official

Organization:

Reviewer's Name, Role, and Organization:

This checklist is designed to aid A/OPCs during AO and
cardholder/checkwriter reviews and surveillance. If additional space is
needed to address areas not specifically listed on the checklist,
document and explain findings on a separate sheet.

  ------------------------------------------------------------------------
  Approving Official Questions        Yes   No    N/A   Comments
  ----------------------------------- ----- ----- ----- ------------------
  **Does the AO have a signed                           
  certification (or electronic                          
  equivalent) stating that they                         
  understand and agree to abide by                      
  the policies and procedures of the                    
  HHS purchase card program?**                          

  **Has the AO received appropriate                     
  purchase card training?**                             

  **Are AO requests for new                             
  cardholders adequately justified?**                   

  **Is the AO's span of control                         
  appropriate given the amount of                       
  transactions being conducted and/or                   
  the AO's availability to adequately                   
  review cardholders' transactions?**                   

  **Does the AO coordinate with the                     
  Finance office to establish funding                   
  levels for new cardholders?**                         

  **Are the cardholders under the AO                    
  appropriate, for example, the AO's                    
  supervisor is not a cardholder                        
  under the AO?**                                       

  **Does the AO review his/her                          
  cardholders' purchase transactions                    
  each billing cycle?**                                 

  **Does the AO ensure that his/her                     
  cardholders are maintaining                           
  purchase logs and documentation?**                    

  **Does the AO promptly process                        
  cardholders' statements at the end                    
  of the billing cycle?**                               

  **Does the AO deny approval to                        
  questionable purchases, or                            
  follow-up with the cardholder as                      
  needed?**                                             

  **Does the AO ensure that purchases                   
  are for bona fide needs?**                            

  **Does the AO prohibit others from                    
  approving cardholder                                  
  transactions?**                                       

  **Does the AO promptly notify the                     
  A/OPC when a cardholder departs,                      
  retires, or no longer requires a                      
  card?**                                               

  **Does the AO promptly notify the                     
  A/OPC of any lost, stolen, or                         
  compromised accounts?**                               

  **Does the AO promptly notify the                     
  A/OPC of any suspected                                
  cardholder/checkwriter abuses or                      
  misuses?**                                            

  **If convenience checks are                           
  authorized for an AO's                                
  cardholder(s), does the AO ensure                     
  that checks are limited to \$3,000                    
  or less?**                                            

  **If convenience checks are                           
  authorized for an AO's                                
  cardholder(s), does the AO ensure                     
  that checks are adequately                            
  secured?**                                            

  **Does the AO coordinate with the                     
  Finance office to establish funding                   
  levels for new cardholders?**                         

  **Does the AO verify that all                         
  accountable property purchased has                    
  been recorded per OPDIV                               
  requirements?**                                       

  **Does the AO ensure that purchase                    
  card records for existing and                         
  closed accounts are maintained per                    
  record retention requirements?**                      
  ------------------------------------------------------------------------

  ------------------------------------------------------------------------
  Cardholder Questions                Yes   No    N/A   Comments
  ----------------------------------- ----- ----- ----- ------------------
  **Does the Cardholder have a signed                   
  certification (or electronic                          
  equivalent) stating that they                         
  understand and agree to abide by                      
  the policies and procedures of the                    
  HHS purchase card program?**                          

  **Does the Cardholder have a letter                   
  delegating specified procurement                      
  authority?**                                          

  **Has the Cardholder received                         
  training on procedures for using                      
  the purchase card?**                                  

  **Has the Cardholder participated                     
  in refresher training sessions or                     
  received refresher training                           
  material?**                                           

  **Does the Cardholder know and                        
  comply with his or her monthly                        
  spending limits?**                                    

  **Does the Cardholder refrain from                    
  order-splitting?**                                    

  **Is the single purchase limit set                    
  at \$3,000 or less for                                
  non-warranted Cardholders?**                          

  **Did the Cardholder ascertain that                   
  adequate funds were available prior                   
  to the purchase?**                                    

  **Does the Cardholder obtain all                      
  required pre-purchase approvals and                   
  authorizations?**                                     

  **Is the Cardholder's monthly                         
  spending limit justified by his or                    
  her buying activity?**                                

  **Were all purchases made by the                      
  Cardholder authorized and for bona                    
  fide needs? If the answer is "No,"                    
  describe any unauthorized                             
  purchases.**                                          

  **Were all Cardholder purchases for                   
  allowable products or services?**                     

  **Does the Cardholder complete a                      
  purchase card log entry for each                      
  purchase?**                                           

  **Is the Cardholder advising                          
  merchants that purchases are tax                      
  exempt, and providing tax exempt                      
  certificates when necessary?**                        

  **Does the Cardholder register/log                    
  transactions and reconcile all                        
  transactions with the bank                            
  statement during each billing                         
  cycle?**                                              

  **Does the Cardholder safeguard his                   
  or her card (for example, by not                      
  allowing others to use it)?**                         

  **Is the card signed and in the                       
  possession of the Cardholder?**                       

  **Does the Cardholder comply with                     
  the requirements to purchase items                    
  from mandatory sources in                             
  accordance with FAR Part 8?**                         

  **Does the Cardholder make                            
  purchases from the HHS strategic                      
  sourcing contracts/BPAs when                          
  appropriate, or prepare a waiver                      
  per HHS guidance?**                                   

  **Does the Cardholder rotate                          
  sources when placing repeat orders                    
  for open market purchases?                            
  (assuming no strategic sourcing                       
  agreements in place or other source                   
  restrictions)**                                       

  **Did the Cardholder award the                        
  purchase on a basis of other than                     
  price (best value to the                              
  Government)?**                                        

  **If the Cardholder made a best                       
  value award, was the basis                            
  documented in the file?**                             

  **Does the Cardholder document all                    
  transactions that posted to the                       
  billing statement but were not                        
  received, and utilize a tracking                      
  system to verify their subsequent                     
  delivery?**                                           

  **Does the Cardholder maintain                        
  supporting documentation for his or                   
  her purchases?**                                      

  **Does the Cardholder attempt to                      
  resolve questionable or disputed                      
  purchases with the vendor?**                          

  **For unresolved vendor disputes,                     
  does the Cardholder notify the                        
  servicing bank in writing within 60                   
  days?**                                               

  **Did the Cardholder ask for and                      
  obtain any discounts to which HHS                     
  was entitled (discounts on existing                   
  BPAs, Govt. discounts, etc.)?**                       

  **Did the Cardholder document his                     
  or her records to indicate receipt                    
  of the purchased product?**                           

  **If delivery of the product occurs                   
  at another location, are records                      
  maintained by receiving personnel                     
  to document delivery?**                               
  ------------------------------------------------------------------------

  ------------------------------------------------------------------------
  Additional Questions for            Yes   No    N/A   Comments
  Cardholders with\                                     
  Authority \> \$3,000                                  
  ----------------------------------- ----- ----- ----- ------------------
  **Does the Cardholder have a                          
  warrant that supports the single                      
  purchase limit on his or her                          
  card?**                                               

  **Did the Cardholder obtain at                        
  least three vendor quotations to                      
  establish price reasonableness?**                     

  **If competitive vendor quotes were                   
  not obtained, was the basis for                       
  price reasonableness documented in                    
  the file?**                                           

  **Does the file contain a sole                        
  source justification for any                          
  purchases that were not awarded                       
  competitively?**                                      

  **If the purchase was for services,                   
  did the Cardholder include the                        
  Service Contract Act wage                             
  determinations or exemptions as                       
  applicable?**                                         

  **If the award was not made to a                      
  small business, did the Cardholder                    
  document the file with the                            
  rationale?**                                          
  ------------------------------------------------------------------------

  ------------------------------------------------------------------------
  Questions for Convenience Check     Yes   No    N/A   Comments
  Users                                                 
  ----------------------------------- ----- ----- ----- ------------------
  **Have all checks been issued for                     
  amounts at or below \$3,000?                          
  (except for contracting personnel                     
  who may have higher authority per                     
  their warrant)**                                      

  **Does the Checkwriter capture all                    
  of the necessary Internal Revenue                     
  Service (IRS) Form 1099 data for                      
  reporting to the IRS?**                               

  **Have all checks been written by                     
  the checking account holder?**                        

  **Have all checks been written for                    
  items to be delivered before the                      
  end of the next billing cycle?**                      

  **Have all checks been written for                    
  only authorized items (for example,                   
  no prohibited purchases)?**                           

  **If stop-payment actions were                        
  processed against any check, was                      
  the charge deducted from the funds                    
  available?**                                          

  **Does the Checkwriter account for                    
  checks written but not processed by                   
  the servicing bank when reconciling                   
  his or her account?**                                 

  **Does the Checkwriter follow up                      
  with merchants who are slow to cash                   
  convenience checks?**                                 

  **Are checks stored in locked                         
  containers when not in use?**                         
  ------------------------------------------------------------------------

  ------------------------------------------------------------------------
  Questions Regarding Purchases       Yes   No    N/A   Comments
  During Emergencies                                    
  ----------------------------------- ----- ----- ----- ------------------
  **Did the Cardholder/Checkwriter                      
  complete an Emergency Purchase Log                    
  entry for each purchase made during                   
  the emergency?**                                      

  **If the Cardholder's purchase                        
  limits were increased during the                      
  emergency, did the Cardholder only                    
  apply the higher limits to                            
  purchases in support of the                           
  emergency?**                                          

  **If the Cardholder used an                           
  emergency card with purchase limits                   
  above the micropurchase threshold,                    
  were FAR procedures followed for                      
  any purchases that exceeded the                       
  micropurchase threshold?**                            

  **Did the Cardholder obtain                           
  delivery verification from the                        
  customer for any products or                          
  services that were delivered to the                   
  site of an emergency?**                               

  **Did the Cardholder only purchase                    
  products or services permitted by                     
  this guide, unless officially                         
  exempted by law, Executive Order,                     
  or other official policy in                           
  response to the emergency?**                          

  **Did the Cardholder seek guidance                    
  for any questionable purchases or                     
  situations during the emergency,                      
  and document the results?**                           

  **Did the Cardholder maintain                         
  purchase documents and forward them                   
  to the AO for approval of purchases                   
  at the end of the billing cycle?**                    

  **If the Cardholder was deployed to                   
  the emergency site, did the                           
  Cardholder assemble a deployment                      
  kit to support his or her purchase                    
  card duties prior to deploying?**                     

  **Did the Cardholder's AO review                      
  and approve all transactions made                     
  by the Cardholder during the                          
  emergency?**                                          
  ------------------------------------------------------------------------

# Appendix G. References and Resources {#appendix-g.-references-and-resources .unnumbered}

**[General]{.underline}**

GSA SmartPay Program:
<http://www.gsa.gov/Portal/gsa/ep/channelView.do?pageTypeId=8199&channelPage=%2Fep%2Fchannel%2FgsaOverview.jsp&channelId=-13497>

Best Practices Guide for Purchase and Travel Card Management:\
<http://www.gsa.gov/gsa/cm_attachments/GSA_DOCUMENT/BestPractices_R2FIM2_0Z5RDZ-i34K-pR.pdf>

Helpful Hints for Purchase Card Use:\
<http://www.gsa.gov/gsa/cm_attachments/GSA_DOCUMENT/PurchaseMiniBook5-04Edit_R2FIM2_0Z5RDZ-i34K-pR.pdf>

Tax Exempt Letters:\
<http://apps.fss.gsa.gov/services/gsa-smartpay/taxletter/>

**[Training and Education]{.underline}**

GSA Cardholder Training:\
<http://www.gsa.gov/Portal/gsa/ep/contentView.do?P=FCX5&contentId=13034&contentType=GSA_BASIC>

GSA A/OPC Training:\
<http://www.gsa.gov/Portal/gsa/ep/contentView.do?P=FCX5&contentId=13032&contentType=GSA_BASIC>

HHS Acquisition Training and Workforce Management:\
<http://www.knownet.hhs.gov/acquisition/training.htm>

HHS University: <http://learning.hhs.gov/>

Federal Acquisition Institute (FAI): <http://www.fai.gov/>

Defense Acquisition University (DAU): <http://www.dau.mil/>

**[Regulations, Policies, and Procedures]{.underline}**

Federal Acquisition Regulation (FAR) Part 13:\
<http://acquisition.gov/far/current/html/FARTOCP13.html>

HHS Acquisition Regulation (HHSAR) Part 313: (Link is in HHSAR Table of
Contents)\
<http://knownet.hhs.gov/acquisition/hhsar/Default.htm>

HHS Purchase Card Guide (scroll down the page to Purchase Card
Management):\
<http://knownet.hhs.gov/acquisition/policy.htm>

OMB Circular A-123 Appendix B:\
<http://www.whitehouse.gov/omb/circulars/a123/a123_appendix_b.pdf>

U.S. Department of the Treasury Financial Manual Vol. 1, Part 4, Chapter
4500:\
<http://www.fms.treas.gov/tfm/vol1/v1p4c450.txt>

**[Purchasing]{.underline}**

GSA Schedules:\
<http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=8106&contentType=GSA_OVERVIEW>

GSA Advantage:\
<https://www.gsaadvantage.gov/advgsa/advantage/main/start_page.do?BV_SessionID=@@@@1453000169.1150908776@@@@&BV_EngineID=ccccaddidihmkhmcflgcefmdgfhdgjn.0>

GSA Global Supply:\
<http://www.gsa.gov/Portal/gsa/ep/contentView.do?P=FL2&contentId=10165&contentType=GSA_OVERVIEW>

The Committee for Purchase From People Who Are Blind or Severely
Disabled:\
[http://www.abilityone.gov/jwod/index.html](http://www.jwod.gov/jwod/index.html)

Javits-Wagner-O'Day Act (JWOD) Internet store: <http://www.jwod.com/>

Federal Prison Industries, Inc. (UNICOR): <http://unicor.gov/index.cfm>

Excess Federal Property:\
<http://www.gsa.gov/Portal/gsa/ep/channelView.do?pageTypeId=8211&channelPage=%2Fep%2Fchannel%2FgsaOverview.jsp&channelId=-13014>

HHS Strategic Sourcing: <http://intranet.hhs.gov/ssc/> and
<http://intranet.hhs.gov/hwac/>

HHS Contingency Contracting:\
<http://www.hhs.gov/oamp/cc/>

**[Audits, Reviews, and Oversight]{.underline}**

Standards for Internal Control in the Federal Government:\
<http://www.gao.gov/archive/2000/ai00021p.pdf>

Audit Guide for Government Purchase Card Programs:\
<http://www.gao.gov/new.items/d0487g.pdf>

Blueprint for Success -- A Guide to Purchase Card Oversight:\
<http://www.gsa.gov/gsa/cm_attachments/GSA_DOCUMENT/Bluprint10_04v2_R2FIM2_0Z5RDZ-i34K-pR.pdf>

# Appendix H. HHS Purchase Card Program Points of Contact {#appendix-h.-hhs-purchase-card-program-points-of-contact .unnumbered}

**HHS Purchase Card Program Coordinator (HHS A/OPC)**

HHS Doris Pearson 202-690-6549 <Doris.Pearson@hhs.gov>

**HHS OPDIV A/OPCs**

AHRQ La-Treece Stewart 301-427-1830 <la-treece.stewart@ahrq.hhs.gov>

CDC Janet Keck 770-488-2618 <jwk1@cdc.gov>

CMS Joyce Divers 410-786-5151 <jdivers@cms.hhs.gov>

FDA Susan Ruckman 301-827-7170 <susan.ruckman@fda.hhs.gov>

HRSA Stu Sklamm 301-443-5260 <ssklamm@hrsa.gov>

IHS Peggy Monroe 301-443-5774 <peggy.monroe@ihs.gov>

NIH Georgiann Wilson 301-435-3938 <wilsong@od.nih.gov>

PSC\* Sheri Kretschmaier 301-443-6557 <sheri.kretschmaier@psc.hhs.gov>

SAMHSA Sandra Dinisio 240-276-1005 <Sandra.Dinisio@samhsa.hhs.gov>

\*Serves as A/OPC for the PSC, AoA, ACF, and OS

**HHS Office of Inspector General, Office of Investigations**

To report suspected purchase card or convenience check fraud, call
1-800-HHS-TIPS

# Appendix I. Glossary {#appendix-i.-glossary .unnumbered}

**Agency/Organization Program Coordinator (A/OPC):** The individual in
each OPDIV responsible for managing the OPDIV's purchase card program.
The A/OPC at the HHS Headquarters level is responsible for the overall
HHS program and is known as the HHS Purchase Card Program Coordinator.

**Approving Official (AO):** The individual responsible for reviewing
and approving a cardholder's transactions.

**Accountable Property:** Property recorded in a formal property
management or accounting system. Accountable property is defined by a
dollar threshold and/or the type of item (e.g., sensitive or
pilferable). Accountable property includes all property purchased,
leased (capital leases), or otherwise obtained, having a unit
acquisition cost of \$5,000 or more (land, regardless of cost); and
items that are sensitive, including but not limited to pilferable items.
*Sensitive items* require a high degree of protection and control. They
may include items that are governed by statutory requirements or
regulations, such as narcotics and drug abuse items; precious metals;
items that are of a high value, highly technical, or a hazardous nature.
Additional and/or separate records or other record-keeping instruments
shall be established for management purposes, or when otherwise required
by law, policy, regulation, or agency direction. *Pilferable items* have
a ready resale value or application to personal possession and are
therefore especially subject to theft.

**Anti-Deficiency Act:** Federal statute that prohibits the purchase of
products or services for which funds are unavailable or have not been
appropriated.

**Bank (or Cardholder) Statement:** The official monthly billing
statement provided by the servicing bank to cardholders. The bank
statement identifies all of the cardholder's purchase card transactions
during a billing cycle. The statement can be paper based or presented
through an electronic system.

**Billing Date:** The billing date is the date on which the invoice is
received by the agency/organization Finance Office in accordance with
the Prompt Payment Act.

**Billing Office:** The billing office is the HHS Office of Financial
Services, which receives the official invoice from the servicing bank
and is responsible for making payment.

**Blanket Purchase Agreement (BPA):** A simplified method of filling
anticipated repetitive needs for supplies or services by establishing
"charge accounts" with qualified sources of supply. BPAs are designed to
accomplish simplified acquisitions by eliminating the need for numerous
individual purchase orders. HHS has established a number of strategic
sourcing BPAs for various products and services.

**Cardholder:** An individual who has met specified requirements (e.g.,
training provisions, granted delegation of procurement authority) and,
in turn, has been issued a purchase card to conduct authorized
procurement transactions. The cardholder is responsible for complying
with all Federal and HHS policies and procedures governing the use of
the purchase card.

**Checkwriter:** An individual who has met specified requirements (e.g.,
training provisions, granted delegation of procurement authority) and,
in turn, has been issued convenience checks to conduct authorized
procurement transactions. The checkwriter is responsible for complying
with all Federal and HHS policies and procedures governing the use of
convenience checks.

**Convenience Checks:** Checks issued by the servicing bank to be used
in cases where the individual or merchant to be paid is not able to
accept a purchase card. OPDIVs may elect not to authorize the use of
convenience checks. If authorized for use in an OPDIV, only the A/OPC
may approve and order convenience checks for cardholders/checkwriters.

**Customer:** An individual or organization that requires supplies or
services.

**Declined Transactions:** Transactions where authorization has been
refused by the issuing bank's transaction authorization system.

**Delegation of Procurement Authority (DPA):** A document, issued by the
Head of the Contracting Activity (or designee), that establishes an
individual as an authorized cardholder. This delegation of procurement
authority shall specify spending and usage limitations unique to the
cardholder.

**Dispute:** A disagreement between a cardholder and a merchant
regarding items appearing on the cardholder's monthly statement of
account, which is presented to the issuing bank for resolution.

**Emergency Card:** A purchase card requested in advance specifically
for use during emergencies. Emergency cards may have fewer restrictions
or higher purchase limits to support purchases during emergencies.
Emergency cards are not subject to cancellation due to inactivity.

**Fraudulent Purchases:** The willful misuse of the purchase card (or
convenience check) to acquire supplies or services that are unauthorized
and intended for personal use or gain, resulting in damage or harm to
another. Examples include a cardholder's unauthorized purchase of power
tools for his home, a supplier's intentional charges for services not
provided, and the unauthorized use by a third party of a cardholder's
compromised or stolen account for personal gain.

**Government Purchase Card or GSA SmartPay Card:** The charge card
account established with the issuing bank that enables properly
authorized government personnel to buy and pay for supplies and services
in support of official government business.

**Hierarchy:** The way in which charge card accounts are structured
within the organization responsible for issuing the card.

**Improper Purchases:** Purchase card transactions that are intended for
government use but are not permitted by law, regulation, or organization
policy generally are considered improper. Examples include certain types
of purchases of meals or refreshments for government employees within
their normal duty stations; purchases split to circumvent micro-purchase
or other single purchase limits; and purchases from other than
statutorily required sources, such as the Javits-Wagner-O'Day AbilityOne
(formerly JWOD) program.

**Inactive Card:** For HHS, an inactive purchase card is defined as a
card account with no activity during the preceding six month period.
Cards designated as emergency cards are exempted from this definition.

**Internal Controls for the Purchase Card Program:** Internal controls
for the purchase card program are the measures that HHS and OPDIVs take
to ensure program integrity, safeguarding of account information, and
program effectiveness. Internal controls consist of the policies,
procedures, training, organization, and surveillance governing the HHS
purchase card program.

**International Merchant Purchase Authorization Card (IMPAC):** A
registered trademark provided by U.S. Bank, a government charge card
contractor, to identify its government VISA charge card. Formerly, IMPAC
was a generic term for government purchase cards.

**Issuing Bank:** A financial institution responsible for issuing
purchase cards as a result of a task order against the GSA SmartPay
Master Contract.

**Merchant Category Code (MCC):** A code used by the issuing bank to
categorize each merchant according to the type of business in which the
merchant is engaged and the kinds of supplies or services provided.
These codes are used as authorized transaction codes on a card/account
to identify the types of businesses that provide authorized supplies or
services. A cardholder's account limitations should reflect the normal
usage by that cardholder rather than defaulting to the maximum
available.

**Micro-Purchase:** An acquisition of supplies or services, the
aggregate amount of which does not exceed \$3,000 except for services
subject to the Service Contract Act, which are limited to \$2,500, and
construction, which is limited to \$2,000).

**Misuse:** Use of a government purchase card for other than official
government purposes, including purchases of authorized products or
services at terms (e.g., price, quantity) that are excessive, that are
for a questionable government need, or that fail to follow purchase card
policies and procedures.

**Monthly Purchase Limit:** An authorization control that limits a
cardholder's cumulative spending for purchases during each month's
billing cycle. This limit is used to ensure cardholders do not exceed
reserved funding.

**Office Limit:** The office limit is the sum total of all cardholders'
monthly purchase limits under their AO. When new cardholder accounts are
established, the maximum amount of funding authorized for an office (or
AO account) to spend during a month will determine the office limit and
affect the individual cardholders' monthly limits.

**Pre-Purchase Approval:** HHS policy requires all card and check
purchases to be pre-approved in writing by the cardholder's AO,
supervisor, A/OPC, or higher official. In addition, this guide and/or
OPDIV procedures may require certain products and services (identified
in [Appendix D](#appendix-d.-purchases-requiring-special-attention)) to
have an additional approval or clearance before they may be purchased.

**Prompt Payment Act:** Public Law 97-177 (96 Stat 85, U.S.C. Title 31,
Section 1801) requires prompt payment of invoices (billing statements)
within 30 days of receipt. An automatic interest penalty is required if
payment is not timely.

**Purchase Card Log:** A manual or automated log in which the cardholder
documents his/her individual transactions and screening for mandatory
sources when using the purchase card and/or convenience checks. Entries
in the purchase log may be supported by internal agency documentation
(e.g., request for procurement document or e-mail request). The purchase
card documentation should provide an audit trail supporting the decision
to use the card and any required special approvals that were obtained.
At a minimum, the log will contain the date on which the item or service
was ordered, the merchant's name, the dollar amount of the transaction,
a description of the item or service ordered, and an indication of
whether the item was received.

**Reactivation:** The activation of purchase card privileges after
suspension.

**Reconciliation:** The process by which the cardholder and the AO
review the monthly bank statements, reconcile against available supplier
receipts and purchase card logs, and authorize payment of those charges
provided on the monthly invoice.

**Required Sources of Supply:** The priority of sources is dictated by
FAR Part 8, Required Sources of Supplies and Services, and Subpart
8.001, Priorities for Use of Government Supply Sources. Required sources
must be considered before an open-market purchase can be made.

**Requirement:** The description of the government's needs that leads to
a purchase.

**Single Purchase Limit:** The dollar limit imposed on each purchase
assigned to each cardholder account by the issuing OPDIV, as reflected
in the DPA. A cardholder's account limitations should reflect the normal
usage by that cardholder and must not default to the maximum available.

**SmartPay:** A GSA program that provides users with card-based tools to
simplify procuring needs in three operational areas. The fleet card
allows users to efficiently fuel and maintain vehicles, boats, planes,
or equipment. The travel card allows users to purchase common carrier
transportation, car rentals, lodging, and meals for official travel and
travel-related expenses. The purchase card enables users to make
day-to-day purchases of supplies and services to satisfy official
business needs.

**Split Purchase:** Separating a requirement that exceeds a cardholder's
single purchase limit or threshold into two or more buys as a means of
getting around the cardholder's purchase limit. No government purchase
cardholder may fragment/split purchases that exceed the cardholder's
limit or threshold, as means to use the purchase card. To do so is a
violation of federal procurement law.

**Strategic Sourcing Initiative:** A structured process by which HHS
examines its spending patterns and establishes/utilizes Government-wide
or HHS-wide contractual instruments to leverage spend and service
opportunities.

**Suspension:** The process in which an individual is prohibited from
making purchases with a charge card/account due to delinquency,
excessive span of control, or accounts in pre-suspension status multiple
times.

**Tax Exemption:** The elimination of state and local taxes from federal
purchases in accordance with state and federal law. The phrase "U.S.
Government Tax Exempt" is printed on the front of each purchase card.

**Termination/Cancellation:** The process by which cardholder or AO
accounts are deactivated. Accounts may be terminated by ASAM/OAMP,
A/OPCs, OPDIV Management, and by cardholder or AO request. Reasons for
account termination include misuse or fraud, inactivity, incomplete
training, personnel changes, and changes in requirements such that a
card is no longer needed.

# Appendix J. Deviations {#appendix-j.-deviations .unnumbered}

This Appendix summarizes any OPDIV deviations to the policies in this
guide that have been approved by ASAM/OAMP.

As of this version of the Guide, there are no OPDIV deviations.

[]{#_Selection_and_Appointment_of_A%2FOPCs .anchor}

[^1]: See IV.D.3. for reporting suspected fraud or misuse.

[^2]: Another means of accomplishing this is to temporarily reduce the
    cardholder's single purchase amount to a low dollar value.

[^3]: A backorder is defined as an item that has not been manufactured
    or is out of stock and not available in a merchant's warehouse.

[^4]: An exception to this policy applies to contracting personnel in an
    OPDIV's contracting office who may have this authority under the
    terms of their warrant.