# Presentation: 463196

## GSA SmartPay® Purchase Cardholder Training

- Brad Forrestel

**Notes:**
Good Morning/Afternoon.  My name is Brad Forrestel and I am a Contract Specialist on the GSA SmartPay® team.

## OVERVIEW

- Introduction
- Getting Started
- The Players
- Proper Card Use
- Making Purchases
- Card Administration
- References
- Quiz

**Notes:**
This morning/afternoon, we are going to discuss several aspects of being a purchase charge cardholder.  I will begin with a brief introduction to the program with some FY05 statistics and then move into  some benefits and rules of the charge card program.  I will also present material on the “players” and their roles in the GSA SmartPay program.  This will be followed by information on proper card usage, making purchases (from start to finish) and program administration information such as renewal, cancellation  or suspension.  At the end, I will provide you will references for all of the information in the presentation and a brief quiz.  Don’t worry, the quiz will not be graded!  But, it will give you some insight into the quiz available in the online training module on the GSA SmartPay website.  Again, this information will be posted in the reference section of this presentation.  I have left time at the end for questions, but if you want to ask them during, please feel free to do so.  

## INTRODUCTION

- GSA SmartPay®
- 5 year Master Contract with 5 One-Year Options
- Purchase, Travel and Fleet Charge Cards
- Fiscal Year 2005
- 26 Million Transactions
- $17.4 Billion Spent
- 301,216 Cardholders

**Notes:**
So, let’s get started!  GSA SmartPay is the name of the government purchase, travel and fleet charge card program.  Many of you may also know it by it’s former name IMPAC. The master contract has a five year base period with five one year option periods.  It began in 1998 and ran through Nov. 2003.  At this point it was then determined whether or not the government wanted to unilaterally extend the first option period.  It extended it.  There are a total of five one year option periods which can potentially carry the contract into 2008.

In fiscal year 2005, there were about 301,000 cardholders across the globe.  These people account for 26 million transactions completed with the purchase card and a total of $17.4 billion spent with the cards.  This is a 1.8 percent increase in spend since last reported in FY04.  So what does this mean?  Well, it means $1.4 billion in administrative savings to the government through the use of the GSA SmartPay purchase card!  

## GETTING STARTED

- Account Set-Up
- “For Official Government Use Only”
- Card Benefits
- Saves Time, Money and Resources
- Financial Cash Management
- Worldwide Acceptance

**Notes:**
Now, let’s get rolling into what this program means to you – the cardholder.  Accounts are set up for individual cardholders but are paid through a centrally billed account in your agency.  The cards are for OFFICIAL GOVERNMENT USE ONLY.  So what does this mean?  No, your uncle Charlie can’t use the card to buy the new hotrod he’s been dreaming about!  And, no you can’t use it to buy if for him either.  But, I’m sure everyone already knew that.  

Some benefits of the GSA SmartPay program include monetary savings, (remember the $1.4 billion, well that’s a pretty significant savings), saving time by allowing cardholders to “swipe” a card rather than write out a purchase order and saving resources such as the Paper Reduction Act calls for etc.  The charge cards also allow agencies to monitor funds electronically and in real time so they can be sure to use funds effectively and efficiently!  Another benefit?  The card works just like any corporate card and is accepted worldwide!!

## THE PLAYERS

- Cardholders
- Government Purchaser
- Responsible for Proper Use
- Accountability
- Approving Official
- Assure Proper Use of the Card
- Ensures that Purchases are Necessary to Accomplish the Mission of the Agency

**Notes:**
So who are the people involved in the GSA SmartPay program?  The first player we will discuss is the cardholder (that’s you!).  The cardholder is the most important player.  He/she is responsible for purchasing necessary products and services on behalf of the Federal Government.  The cardholder is responsible for proper card use such as keeping it in a safe and secure location and confirming all purchases made with the card.  The responsibility for proper use also coincides with accountability.  The cardholder IS accountable for ALL purchases made with the card!  In addition, the cardholder must also make informed buys with the card, observe all dollar limitations and reconcile /document all transactions.
The approving official is usually a supervisor who’s primary purpose is to assure proper use of the purchase card. This person may also be an Agency/Organization Program Coordinator or A/OPC.  

## THE PLAYERS Cont’d

- Agency/Organization Program Coordinator (A/OPC)
- Focal Point for Questions
- Task Order Administration
- Establishes and Maintains Accounts
- Issuance and Destruction of Cards
- Transaction Dispute Officer (TDO)
- Assist in Resolution of Transaction Disputes
- Works with A/OPC and Contractor
- Centrally Billed Accounts (CBAs)

**Notes:**
The A/OPC is the focal point for answering questions, administering the agency’s task order (against the GSA monitored Master Contract), establishing and maintaining accounts, and the issuance and destruction of cards.  The A/OPC has a direct relationship with the card provider (bank) and the GSA SmartPay program office.  The A/OPC establishes guidelines for your agency in accordance with the FAR, the GSA SmartPay master contract and your agency’s procurement policies.  If you ever have any questions about the program, the A/OPC is the first person you should go to.

The Transaction Dispute Officer (TDO) is available to assist you with the resolution of any problems.  This person will dispute improper transactions with the bank contractor.  In addition, the TDO will see the dispute through the entire process, working closely with the A/OPC, you (the cardholder) and the Designated Billing Office.  It’s important to note that not all agencies have a TDO.  In fact the TDO may be the A/OPC, you or even the Designated Billing Office.  If you don’t know who/ if your agency has a TDO, check with you’re A/OPC. 

## THE PLAYERS Cont’d

- Designated Billing Office (DBO)
- Receives CBA Invoices
- Ensures Prompt Payment of Invoices
- Works with A/OPC and Contractor
- Purchase Card Contractor
- 5 Contractors
- Issues Cards
- Pays Merchants
- 24-hour Customer Service

**Notes:**
The Designated Billing Office receives the centrally billed invoices from the bank contractor.  This office generally serves as the liaison between the A/OPC and the bank.  The DBO oversees proper processing of invoices and ensures that all invoices are paid within the specified Prompt Payment Act timelines.  

The Purchase Card contractor or “bank contractor” will be one of the five following banks:  Bank One, Bank Of America, Citibank, Mellon Bank or US Bank.  The back of your card will tell you which bank your agency has contracted with.  The bank will issue your agency all of its purchase cards, establish the accounts, pay the merchant for the supplies/services acquired by your agency and the bank will prepare the monthly statement.  The statement is issued to the DBO (designated billing office).  Finally, the bank is there to provide you and your agency 24 hour, 7 days a week with customer service.  There should be a 1-800 number on the back of you card that you can use to contact the bank directly.  

## THE PLAYERS Cont’d

- Merchant
- Source for Your Supplies or Services

**Notes:**
The final player in all of this is the merchant.  The merchant serves as the source for you to purchase the supplies/services necessary for your agency to carry out its mission.  The merchant may be a required source (like NIB/NISH), another government agency (like GSA if buying products or services) or a private sector merchant of supplies or services.

## PROPER CARD USE

- Standards of Ethical Conduct
- Gifts from Sources
- Definitions
- Basic Gift Rules
- Acceptable
- Unacceptable

**Notes:**
To switch gears a little, let’s now focus on using the GSA SmartPay purchase card properly.  This is not a course specifically designed for ethics training, so I will just briefly discuss ethical standards of conduct.  If you have any specific questions on this section, a website is provided in the reference section or you can contact your agency’s legal counsel.  

The law states the an employee shall not directly or indirectly solicit or accept a gift from a prohibited source or a gift that is offered because of the employee’s official position.  So, what is a gift?  It can be considered to be anything of monetary value such as gratuities, favors, discounts, entertainment, hospitality, loans, forbearance, services, training, transportation, travel, meals, lodging etc.
Of course, there are always exclusions to the gift rules but the most common is the modest food items such as coffee, donuts, soft drinks (not offered as a part of a meal).  For more information on the Standards of Ethical Conduct, I encourage you to visit the Office of Government Ethics website.  The link is listed in the reference section of this presentation.  
In addition, please keep in mind the idea of unsolicited gifts that are acceptable must be under $20 from one source per event not to exceed more than $50 per calendar year.  Please see the OGE website for more detailed “gift” instructions.

## PROPER CARD USE Cont’d

- Recognizing Fraud
- Definition
- Indicators
- Government Fraud
- Merchant Fraud
- Reporting Fraud
- Alert
- Report to Proper Channels

**Notes:**
Another important part of proper card use is recognizing/reporting of fraud.  Fraud is defined as any felonious act of corruption or attempt to cheat the government or corrupt the government's agents.  Fraud may be committed by government employees or by merchants.  Cardholders have two responsibilities when it comes to fraud:  Be alert to fraud and report any suspected fraud immediately!  Some indicators of possible fraud include but are not limited to: splitting requirements (to be under the micro-purchase threshold), making false statements about what was purchased and buying prohibited purchases.  Some indictors of merchant fraud include:  false charges, mischarging, bribes and gratuities or kickbacks.

So let’s say you bought a box of paper clips from ABC Merchant and when they arrive you see the invoice is $500,000.  Clearly a mistake since no one in their right mind pays or charges $500,000 for paper clips.  What should you do?  Right, call the merchant.  Let’s say in this case you find out the merchant has closed up shop and left for a permanent vacation in Greece. What should you do?  Right, you should contact any of the following people:  Approving Official, A/OPC, Finance Officer and if necessary the IG hotline. There seems to be some indicators of fraud in this case but, let’s not jump the gun, and say the merchant is guilty, but there are some indicators.     

## MAKING PURCHASES

- Initial Card Receipt
- Verify Card Information
- Plan Monthly Purchases
- Ensure Funds Availability
- Conduct Market Research
- Select the Best Value
- (Comparison Shopping)
- Buy Green

**Notes:**
Okay, so now that we’ve discussed some initial introductory aspects of the card program, let’s get into the purchasing part!  
When you initially receive your card from the bank, you should verify that ALL information on the card is correct.  In addition, you should verify that you mailing address is correct as well.  Definitely go over and familiarize your self with the cardholder guide and sign your card.  Be sure to plan your monthly purchases so that you do not exceed your ordering threshold and double check fund availability.  As with any procurement, market research is a MUST.  How else can you ensure that you are getting the Best Value for your agency?  Once your market research is done, depending on the value of the procurement, seek competition or select the Best Value.  

## MAKING PURCHASES Cont’d

- Seek State Tax Exemption
- Talk to Merchants
- Point of Sale Discounts
- Determine Dollar Limits
- Select Required Sources

**Notes:**
In December of 1998, GSA sent a letter requesting tax exemption letters from all 50 states.  The letters we have received are posted on the GSA SmartPay website (listed in the reference section) and may be beneficial in ensuring tax exemptions for your purchases.  Definitely be sure to talk to all merchants and don’t be afraid to ask about price, shipping costs, time of delivery, return policies and discounts.  Point of sale discounts are great because the merchant automatically offers the discount when you pay with the purchase card.

When your account is set up by the A/OPC, single purchase (amount spent at one time) and monthly purchase (amount that can be spent each month) limits are set up based on your Delegation of Authority and budget limits.  Be sure to verify both with your A/OPC and Approving Official.

Be sure to follow the guidelines established for required sources.  Procurements paid for with the card are subject to the acquisition rules established in the FAR and your agency’s policies.

## MAKING PURCHASES Cont’d

- What You Can Buy
- Limits
- Prohibitions
- Long-Term Rental or Lease of Land or Buildings
- Travel or Travel Related Expenses (excluding conference rooms, meeting spaces and local transportation services)
- Cash Advances (unless permitted by A/OPC)

**Notes:**
Knowing what you can/ cannot purchase with your card is one of the most important responsibilities.  Before you use the card, you need to know the limits on its use and manage your purchases against those limits.  If any purchase appears to be questionable, be sure to check with you’re A/OPC or Approving Official or Contracting Office.  

There are many purchases that are strictly prohibited and the purchase card can NEVER be used to procure them.  They include:  Long-Term Rental or Lease of Land or Buildings, Travel or Travel Related Expenses (excluding conference rooms, meeting spaces and local transportation services) and Cash Advances (unless permitted by A/OPC)

## MAKING PURCHASES Cont’d

- Placing Your Order
- Over the Counter
- By Telephone or Fax
- On-line
- Accurate Quotes
- Avoid “Splitting Requirements”
- Keep Your Records

**Notes:**
When using the GSA SmartPay purchase card, orders can be placed over the telephone, via facsimile, online and in person.  You may need to present or show proof of tax exemption with a letter, so be sure to have a copy available if necessary.  Be sure to get a copy of the itemized receipt as soon as possible after placing the order and inquire about any additional charges such as shipping costs.  Be sure to keep the receipt in a safe place so it can be used in the reconciliation process.  

When making the initial purchase, it is important to receive accurate quotes that include taxes and shipping costs.  Price differences between quotes and statement amounts cannot be disputed with the purchase card contractor.  You must contact the merchant and ask for a credit.

It is NEVER permissible to intentionally divide purchases into parts just to get under the limits of your card.  This is called splitting the requirement.  When you have a defined need, all the parts of that need are considered one purchase.

Be sure to keep all information on purchase card transactions.  Information that should be kept includes:  a description and quantity of the item(s) purchased, the amount of the purchase(s), the name of the merchant and the date you received the item purchased.  Failure to retain records can result in excess administrative burden when you attempt to reconcile your monthly invoice statement.  In some agencies you are responsible for keeping all documentation on your purchases and in other agencies, you must forward on your records for retention in a central location.  Check with your agency procedures for this information.

## MAKING PURCHASES Cont’d

- After Your Purchase
- Acceptance Procedures
- Cancellation
- Purchase Return
- Obtain Redress

**Notes:**
Acceptance is verifying that the supply or service actually does meet the minimum requirements of the Government and that the bill should be paid in full.  In most agencies, the Property Office must be notified of any equipment you ordered.  

If you need to cancel an order, immediately contact the merchant.  When the merchant accepts the purchase card as payment, he must comply with VISA or MASTERCARD regulations.  Immediately contacting the merchant allows you to cancel before the item has been shipped.  If the merchant has already processed the transaction, a credit should be issued.  If the merchant has not processed the transaction, simply cancel the order.  Special order items may include a restocking charge.

In most cases you can return the purchase to the merchant for a variety of  reasons within 60 days after the date on your invoice where the item appears as a charge.  By accepting the purchase card as payment, merchants also accept this requirement of the contract between the government and the purchase card contractor.  If the item is damaged in shipment, is not what you ordered or if you are dissatisfied in any way, return the purchase to the merchant and request either a replacement item or a credit to your account.

By accepting the purchase card as payment, merchants agree to refund or replace any defective items.  The first step to obtaining redress is to work with the merchant on a resolution.  This is usually a refund or replacement of the defective item.  If the merchant refuses to issue a credit voucher, you must fill out the required dispute form and send the original to the purchase card contractor (bank).  Filling out the dispute form is the procedure to formally dispute the purchase.

## MAKING PURCHASES Cont’d

- Obtain Sales Draft Copies
- Unapproved Purchases
- Credit Reconciliation
- Convenience Checks

**Notes:**
Obtain a copy of your sales draft (purchase card charge receipts) when making a face-to-face purchase. Sometimes you need a copy of a sales draft to verify an item on your monthly invoice. If you need a copy of the sales draft to verify an item on your monthly invoice, submit the required form to your purchase card contractor. The purchase card contractor will send you a copy of the sales slip.

What happens if you make a purchase that your Approving Official does not approve?
If it has been determined that the item(s) cannot be returned, the Government must pay for the purchase and recoup the amount of the purchase from YOU! That is why it is important to fully understand what CAN and CANNOT be purchased with your purchase card.

On occasion your invoice will show a credit for a transaction that took place in a prior billing period. An example would be a credit for a returned item. When you get a credit several months after the original purchase, reconcile back to the original invoice and note that the credit was received. 

In cases where your credit card is not accepted, your agency/organization may permit the use of convenience checks. If your agency/organization determines a need for convenience checks, your purchase card contractor will provide a supply of checks to the designated cardholder drawn on the cardholder's purchase card account. The checks will be processed as they are presented for payment. Convenience checks are multi-copied (one copy for the cardholder's records; the original for the merchant).

Your convenience checks are sequentially pre-numbered with the following standard pre-printed information:

         United States Government 
         Name of Agency/Organization 
         For Official Use Only 
         U.S. Government Tax Exempt 
         Maximum Dollar amount (optional) 

## CARD ADMINISTRATION

- Requesting a Higher Dollar Limit
- Statement Reconciliation
- Lost/Stolen Cards
- Renewal
- Accounting Code Changes
- Name/Business Changes

**Notes:**
Now that we know how to make proper purchases, let’s discuss the final step in the process:  Card Administration.  

After you use your purchase card for a while, you may decide that a review of your single purchase limit and monthly purchase limit may be wise. You may seek a permanent higher limit on your purchase card by submitting a request to your Approving Official or A/OPC. Temporary increases may also be granted. Contact your Approving Official or A/OPC BEFORE using the purchase card for any purchase which exceeds your limit. The A/OPC will submit the request for a higher dollar limit on your purchase card to the purchase card contractor. Neither permanent nor temporary single and monthly purchase card dollar limits can ever be higher than your Delegation of Authority. 

Make sure that you receive your cardholder statement. You will only receive a statement if you had account activity during the month. The statement is mailed directly to your business address. Identify and annotate any errors and work with the merchants and the contractor on a resolution. You must review and reconcile your statement within the timeframes required by your agency (usually 3 to 5 days). This is one of your primary jobs as a cardholder. Reconciling your statement includes certifying receipts, annotating accounting codes, documenting disputed items, and completing any other documentation required by your agency before forwarding your statement to your Approving Official or the appropriate Payment/Finance office for payment.

Immediately report a stolen or lost purchase card to your A/OPC and the purchase card contractor (the card-issuing bank). The purchase card contractor will mail a new card to you within two business days from the time the theft or loss was reported to the company. The purchase card contractor assigns a new number to the replacement card. 

The purchase card is issued for a defined period of time and will expire.

         You do not need to initiate any action to get your card renewed
         You will receive your new card before your old card expires
         If you do not receive your new card, contact your A/OPC
Destroy expired cards; they need not be returned 

When you receive your purchase card, your A/OPC may assign you an accounting code(s). An accounting code is the internal number that identifies your purchases for accounting purposes. It is important for you to know what to do if you change offices and your accounting code is no longer valid.

If you are transferred to a different office with a different Approving Official, notify your A/OPC, who will take the proper steps to change or assign new information.

Changes in information occur from time to time. There are only a few steps for you to keep your necessary information up-to-date. Report the current information, the new information, and the date of the change to your A/OPC in writing. Your A/OPC will complete the appropriate form and submit the changes to the purchase card contractor.

## CARD ADMINISTRATION Cont’d

- Suspension
- Cancellation
- Billing Concerns
- Item Billed, Not Received
- Item Billed, Returned but Not Credited
- Multiple Billing
- Item Billed, Not Ordered

**Notes:**
Accounts may be suspended and/or cancelled by purchase card contractors due to non-payment. If your account is suspended or cancelled due to failure of the agency to make payment, you will be unable to use the card. If you are advised by the merchant or purchase card contractor that your account has been suspended or cancelled, contact your A/OPC immediately. The purchase card contractor is required to notify your A/OPC when accounts are suspended or cancelled. 

Procedures have been set up to handle cancellation of your purchase card account. The purchase card must be canceled or transferred to your new office when you change jobs or canceled when you leave the employment of the Government. It also must be canceled when you are no longer required to purchase items in support of your mission. To cancel or transfer your card, notify the A/OPC. Your A/OPC will notify the purchase card contractor to cancel or transfer your account.

Billing Concerns
Item Billed Not Received
If you have been billed for an item that has not yet been delivered, you should contact the merchant to determine if the item has been shipped. Try to solve the problem at the merchant level by arranging for receipt of the item or by requesting a credit for the item. Check your agency's procedures. Some agencies will authorize payment of any item that has been shipped but not received.

Item Billed Has Been Returned but Not Credited
If you have returned the merchandise to the merchant, but have not received a credit on your invoice, there is a simple solution: submit a dispute form. Check the appropriate block and send the original of the dispute form to the purchase card contractor.

Multiple Billing
If you have confirmed a double billing you should submit a dispute form. Check the appropriate block and send the original of the dispute form to the purchase card contractor.

Item Billed but Not OrderedIf you have been billed for an item that you never ordered, submit a dispute form. Check the appropriate block and send the original of the dispute form to the purchase card contractor. 

## CARD ADMINISTRATION Cont’d

- Statutes
- Federal Acquisition Regulations (FAR)
- Federal Property Management Regulations (FPMR)
- Federal Acquisition Streamlining Act of 1994 (FASA)

## REFERENCES

- GSA SmartPay®
- _[www.gsa.gov/smartpay](http://www.gsa.gov/smartpay)_
- Master Contract, State Tax Letters, GSA Points of Contact, Purchase Card A/OPC Listing, Contractor Points of Contact
- Ethics Resource Library
- _[www.usoge.gov/home.html](http://www.usoge.gov/home.html)_
- Prompt Pay Act
- _[www.fms.treas.gov](http://www.fms.treas.gov/prompt/)__[/prompt/](http://www.fms.treas.gov/prompt/)_
- FAR
- _[www.arnet.gov/far/](http://www.arnet.gov/far/)_

**Notes:**
As I’ve mentioned throughout this presentation, here are some of the websites that may be beneficial to you.  The GSA SmartPay website is a great place to find master contract information, the state tax letters, GSA points of contact etc.

The ethics resource library contains all the OEG regulations on gift acceptance and regulations.

The Prompt Pay website provides information on payment within the prompt payment timeframes

The Federal Acquisition Regulations website is an online version of the regulations for procurement.

## QUIZ

- The Purchase Card can be used in the event of a personal emergency if, and only if the cardholder’s name is imprinted on the front of the card.

**FALSE**

- The A/OPC serves as the focal point for answering questions related to the purchase card.

**   ****TRUE**

- An employee suspected of misuse should not be reported until he/she is caught “red-handed.”

**FALSE**

**Notes:**
Okay, so now let’s get ready to take a brief simple but easy quiz.  I promise, no grades will be issued but you should all get 100 percent.  

## QUIZ

- Fraud is any act by the Contractor that is considered to be outside the scope of work.

**TRUE**

- If you are using the Purchase Card, Market Research is optional.

**FALSE**

- If your Purchase Card is lost or stolen, you should report it to the A/OPC immediately.
**  **

**TRUE**

**Notes:**
Here are the last few quiz questions.  

## QUESTIONS ? 

- _www.gsa.gov/smartpay_

**Notes:**
If you like this quiz or presentation, you can visit our online purchase cardholder training at www.gsa.gov/smartpay.  Then look under ‘Training” on the right hand side of the webpage.

Are there any questions?  

## THANK YOU!

**Brad Forrestel**
**Contract Specialist**
**GSA SmartPay®**
- _[bradley.forrestel@gsa.gov](mailto:bradley.forrestel@gsa.gov)_
**703-605-2799**

**Notes:**
Thank you for attending this presentation.  Enjoy the GSA EXPO.