# Presentation: 317903

## Travel Card Best Practices

**Lori Mae L. Tadalan**
**Joline McDonald**
**GSA SmartPay®**
**General Services Administration**

**Notes:**
Introduce self.  Ask audience who manages a travel charge card program?  Explain in brief the purpose of training presentation.

## Today’s Agenda

- GSA SmartPay® Overview
- Travel Charge Card Overview
- Ethical and Appropriate Use
- Creditworthiness
- Delinquency Statistics
- Program Best Practices
- Available Resources
- Questions and Answers

## GSA SmartPay® Overview

- GSA SmartPay® contracted with five banks to provide Purchase, Travel and Fleet Card Services:
- Bank of America
- Citibank
- JP Morgan Chase (formerly Bank One)
- Mellon Bank
- U.S. Bank
*   **(These contracts are collectively known as the *
*   **GSA SmartPay® Master Contract)*
- Five year base period (11/98 – 11/03) with Five One-Year Options Available (11/03 – 11/08)
- Agencies/Organizations place task order(s) with selected bank(s) based on identified needs and best value; or pool or tag-along with other agencies to leverage benefits

**Notes:**
In 1998, GSA awarded contracts to five banks for charge card services.  These contracts collectively are referred to as the Master Contract.  The Master Contract had a five year base period and five one-year option periods.  Currently, we are in option period three.  The GSA SmartPay® Master Contract is an IDIQ Task Order Contract which means that agencies place a task order against the master contract in order to be able to tailor the contract to their agencies’ specific needs. 

## Travel Charge Card Overview

- The government travel charge card is
- Use the travel charge card to obtain GSA Airline City Pair rates
- The government saves on travel processing and revenue generation through volume rebates
- Two account types:

| Centrally Billed Accounts (CBA): | Government Liability |
| --- | --- |
| Individually Billed Accounts (IBA): | Individual Liability |

_**mandatory**_

**Notes:**
The Travel and Transportation Reform Act of 1998—also known as Public Law 105-264 mandates that federal government employees use the government-contractor issued travel charge card for all payments of expenses related to official government travel UNLESS an exemption has been granted in accordance with the Federal Travel Regulations (FTR Part 301-70.701).  

The travel charge card controls access to the GSA Airline City Pair rates.  Agencies are only allowed to take advantage of City Pair rates through the GSA SmartPay travel charge card.  City Pairs offers government employees discounted airfares.  For the upcoming fiscal year, City Pairs has awarded savings of between 60 and 69% of full walk up fares.  

One of the main benefits of using the travel charge card is that it saves time from the previous way of processing travel advances.  Additionally, agencies can receive volume-based rebates by utilizing the travel charge card, saving not only administrative time and money, but also seeing additional funds returned to their organizations.

There are two types of travel charge cards.  They are centrally billed accounts, which are directly paid by the government, and individually billed accounts, which are paid by the individual employee and then reimbursed by their agencies.

## Travel Charge Card Overview

- In FY 2005 –
- Over $6.5 Billion in Sales
- 43 Million Transactions
- 1.9 Million Cardholders
- Annual sales volume has doubled since FY98 ($3.4 Billion to $6.3 Billion in FY05)

**Notes:**
In FY 05, the travel charge cards generated over 6.5 billion dollars in sales in 43 million transactions.  The government had 1.9 million cardholders during this time period.  This number of cardholders has decreased since 2002 from 2.1 million, due to agencies revisiting the need for travel charge cards for various individuals.  As you can see, since FY98, travel charge card sales have doubled!

## Ethical and Appropriate Use

- Travel charge cards _**must**_** **be used for official government travel

- All travel individually billed accounts (IBA) _**must**_** **be paid on time by the individual cardholder

- According to the Federal Travel Regulations (FTR) Section 301-51.2(m), employees who travel five (5) times or less a year are exempt from mandatory use

*only*

- per the discretion of an agency/organization’s policy

- of the government travel charge card—

**Notes:**
In order to help combat the delinquency issue with the travel charge card program and to respond to agency request, a government-wide exemption was made to the mandatory use of the travel charge card for those employees who travel 5xs or less a year...

However it is within the discretion of the agency to continue to issue and mandate the use of the charge cards to such employees.

## Creditworthiness

- Pursuant to Section 846 of the Consolidated Appropriations Act, 2006 (Public Law 109-115), your agency is required to assess the creditworthiness of _**first time**_ IBA travel charge card applicants
- Refer to the Office of Management and Budget (OMB) Circular A-123, Appendix B, Chapter 6, Creditworthiness
- For more details, visit _[http://www.whitehouse.gov/omb/financial/fia_travel.htm](http://www.whitehouse.gov/omb/financial/fia_travel.htm)_

## IBA Delinquency (61+ days)

**Notes:**
As you can see in this chart, the delinquency rates for  individually billed accounts has decreased significantly since the beginning of the program. This is due to increased oversight controls, resource tools, and monitoring of cards by agencies government-wide.  Travel charge cards and overall delinquency are better managed due to lessons learned and best practices.

## Delinquency Rates

- Corporate Delinquency 2%-3%
- 2001 Average IBA Delinquency=9%
- 2002 Average IBA Delinquency=7%
- 2003 Average IBA Delinquency=5.3%
- 2004 Average IBA Delinquency=4.2%
- 2005 Average IBA Delinquency=3.4%

**Notes:**
As we saw in the last slide, the overall government-wide delinquency rate is improving where we are nearly at the corporate delinquency rate between 2%-3%.

In fact, just this May the delinquency rate for the federal government was 2.46%.  

## Delinquency

**How Does Your Agency Compare?**

**Notes:**
In managing a travel charge card program for your agency, a good starting point is to ask....How Does Your Agency Compare??

## Delinquency Statistics

**Outstanding IBA 61+ Day Balance: May 2006**

**$9,204,967**

**Notes:**
Though I mentioned in an earlier slide that the federal government rate was at 2.46%...there is always room for improvement.  

The dollar amount here shows how even at 2.46%...speaking dollars, the number is very high. 

## Questions For Managing Your Program

- Does your agency have established policies regarding program managers and cardholders usage?

- Does your agency have  disciplinary policies in place?

- What preventative measures are in place to combat delinquency?

- Does your agency make the most use of the bank’s electronic reports to help manage cardholders?

**Notes:**
Here are some questions to keep in mind for managing your travel charge card program.

Because there are 3 distinct components to GSA SmartPay® (purchase, travel, and fleet) policies pertaining to the program are diffused among many federal government regulations.

Therefore, there is no single source that captures all the relevant laws, regulations, policies that apply to the GSA SmartPay® program.

Rather each agency/organization develops its own policies for the management of its card program—agency policies are typically tailored to an agency’s mission.

But the KEY is implementation of those policies!!

## Program Best Practices

- Engage management at the highest levels
- Train agency program coordinators and cardholders
- Set reasonable monthly credit and cash limits
- Lower credit limits
- Block merchant category codes (MCC) not needed for travel
- Cancel cards of infrequent travelers
- Implement split disbursement and salary offset; mandatory under the authority of OMB Circular A-123, Appendix B

**For management:**

**Notes:**
The current release of the OMB Circular A-123, Appendix B outlines management of a charge card program.

## Program Best Practices

- Set reasonable spend limits
- Monthly credit and cash limits should correspond to historical travel spend patterns and the requirements of the job
- Limits may be raised easily to accommodate special circumstances (e.g., for frequent travelers or extended travel)
- Higher spend limits = More risk

**Notes:**
Share a story??

Mention that a cardholder can review his/her credit limit by calling the 1-800 number on the back of his/her travel charge card.

## Deactivation

- Deactivate travel charge cards when not in use by frequent travelers
- A/OPCs may quickly deactivate/reactivate cards electronically or through the bank customer service
- Authorizations will be declined at point of
- 	sale when using deactivation, notify cardholder of procedures to re-activate (e.g., who to call, when to call)
- Close travel charge card accounts for employees/cardholders who leave the agency

**Notes:**
REMIND those cardholders who move to a new residence to contact the bank to change their home address(es)...

This is a best practice....one that is often forgotten!!

## Restrict Use Through MCC Blocks

- The GSA SmartPay® Master Contract states that the travel charge card shall be used for official government travel related expenses
- Block certain merchant category codes (MCC) to prevent unauthorized use.  Merchants whose business is not travel related should be blocked to prevent a cardholder from making an unauthorized purchase.
- MCC blocks are NOT 100% foolproof—work with merchants/contractors to correct inaccurate MCCs

*only*

**Notes:**
Block those merchant category codes that are not travel related.

But keep in mind that it is the category that is being blocked and not the merchant itself.

## Cardholder Activity Review

- Segregate questionable transactions
- Look for patterns of suspicious behavior
- ATM withdrawals with no other travel-related charges in days surrounding withdrawals
- Charges with merchants at locations not associated with travel (e.g., transactions at local zip codes)
- Declined transactions could indicate misuse

**Notes:**
Share Kristann story while she was on official government travel but had returned home without cash.  

## More Best Practices

- Follow-up with cardholder or supervisor on questionable transactions
- Verify whether cardholder was on travel when transactions were made
- Escalate or refer to IG, depending on agency policy

**Notes:**
Share story about employee who used card “inadvertently” for a purchase...

BUT 
***notified A/OPC***

## Reviewing Reports 

- Review questionable transactions through Exception Reports
- Review Delinquency Reports:
- Pre-suspension
- Suspension
- Pre Cancellation
- Cancellation
- Renewal Reports

**Notes:**
Another way to make sure that you are managing your travel card program properly is to review questionable transactions through exception reports.  This will help you to detect possible misuse of the travel card.  You can also monitor cardholder delinquency by reviewing pre-suspension and suspension, and pre-cancellation and cancellation reports.  These reports will help you to see which cardholders are delinquent in paying their travel card bills.

## Reports Are Key!

- Transaction detail
- Type of merchant
- ATM withdrawals
- Merchant location
- Date of transaction
- Declined transactions
-   Pre-suspension/suspension
-   Pre-cancellation/cancellation

**Notes:**
Here are some examples of other reports that you can utilize to monitor cardholder activity.  You can look at specific transaction details to ensure that cardholders are not making unauthorized purchases such as declined transactions and the type of merchant that the purchase was made at.  

## More Reports!

- Declined Transactions
- Disputes
- Unusual Spending Activity
- Lost/Stolen Card
- Master File
- Renewals
- Ad hoc Reports

**Notes:**
Again, here are some more reports that you may find useful in managing your travel card program.  Take special note of the ad hoc reports.  Although there is a list of required reports in the Master Contract, your banks are also required to provide you with ad hoc reporting capabilities in order to be able to tailor specific reports for your agency’s critical needs.

## Remedial Actions

- Suspension or cancellation of account
- Disciplinary action
- Counseling
- Agency specific reprimand
- Suspension or termination of employment
- Criminal prosecution

**Notes:**
The GSA SmartPay® Master Contract terms & conditions state that:

**the bank may SUSPEND an account if payment for an undisputed amount has not been received at 61 calendars from the due date on the statement of account in which the charge first appeared

**and alternatively, the bank may CANCEL at 126 days.

**delinquency begins at 45 days past due.

It is also important to note that as the A/OPC, you have the right to suspend or cancel accounts at your own discretion at ANY TIME.

AND keep in mind that consequences of misuse/abuse of the travel charge card is agency specific....there are terms and conditions outlined in the master contract, but essentially disciplinary action is based on YOUR agency policy requirements. 

## Program Best Practices

- Address standards of conduct/ethics
- Discuss travel policy (per diem, GSA Airline City Pair rates, reimbursement process, documentation requirements)
- Clearly state consequences for misuse
- References:
- Federal Travel Regulations
- GSA SmartPay® Master Contract terms and conditions
- Agency policies and procedures
- Bank procedures (e.g., billing)

**For cardholder training:**

## Training Goals

- Cardholders and A/OPCs fully understand their roles and responsibilities
- Documentation of training is maintained
- Refresher training is provided periodically/annually
- Training is easily accessible

## Training Resources

- GSA SmartPay® Online Training
- Travel cardholder training available online
- Travel A/OPC training available online
- Agency-provided training
- Bank-provided Electronic Access Training (EAS)
- Mini card-sized brochure for cardholders providing ‘Helpful Hints for Travel Card Use’
- A Guide for Managing Your GSA SmartPay® Travel Charge Card Program (a new 2006 release)

## Shared Customer Agency Best Practices

- Provide bank cardholder agreement online
- Provide a 15-20 minute face-to-face cardholder training
- Provide the GSA SmartPay® mini card-sized booklet, Helpful Hints for Travel Card Use, with each cardholder application
- Provide a reimbursement statement electronically to the cardholder to remind the individual to pay the bill and that reimbursement from the agency has been made

**Notes:**
Many agencies have shared some of their best practices that they find are useful for managing their programs.  Here are some of the practices that they shared...
In addition to those listed, many agencies also find it useful to provide newsletters to cardholders or agency specific websites for travelers to keep their cardholders informed of the latest travel card information, and meet and greets with the A/OPCs so that cardholders are familiar with their card managers with their agencies.

## Benefits To The Program

- Ensure long term program viability
- Reduce administrative burden
- Increase refunds

**Notes:**
The travel card program has many benefits, as discussed at the beginning of our presentation including ensuring long term travel program viability, reducing administrative burdens for GSA’s customer agencies, and increasing refunds.

## Resources

- GSA SmartPay® website, _[http://www.gsa.gov/gsasmartpay](http://www.gsa.gov/gsasmartpay)_
- GSA SmartPay® Travel Charge Card Cardholder Online Training, Charting the Course, _[http://www.gsa.gov/sptraveltraining](http://www.gsa.gov/sptraveltraining)_
- GSA SmartPay® Travel Card Program A/OPC Online Training, _[http://www.gsa.gov/aopctraveltraining](http://www.gsa.gov/aopctraveltraining)_
- Printed Materials:
- A Guide for Managing Your GSA SmartPay® Travel Charge Card Program (a new 2006 release)
- Mini card-sized brochure—Helpful Hints for Travel Card Use
- GSA SmartPay® Team

**Notes:**
Mention “Best Practices” guide available online as well!

## GSA SmartPay® Website Information

- GSA SmartPay® Master Contract
- Cardholders, Transactions, Sales Volume Statistics
- Publications
- Latest Program News and GSA SmartPay® Newsletter “Get Smart”
- Frequently Asked Questions (FAQs)

## Questions and Answers

- Lori Mae L. Tadalan
- (703) 605-2809
- _[lorimae.tadalan@gsa.gov](mailto:lorimae.tadalan@gsa.gov)_

- _[http://www.gsa.gov/gsasmartpay](http://www.gsa.gov/gsasmartpay)_

- Joline McDonald
- (703) 605-2812
- joline.mcdonald_[@gsa.gov](mailto:lorimae.tadalan@gsa.gov)_