U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

1 

59–010 

" ! SENATE 

114TH CONGRESS

1st Session 

REPORT

2015

114–174 

Calendar No. 315 

SAVING FEDERAL DOLLARS THROUGH 

BETTER USE OF GOVERNMENT PURCHASE 

AND TRAVEL CARDS ACT OF 2015 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

TO ACCOMPANY

S. 1616 

TO PROVIDE FOR THE IDENTIFICATION AND PREVENTION OF 

IMPROPER PAYMENTS AND THE IDENTIFICATION OF STRATEGIC 

SOURCING OPPORTUNITIES BY REVIEWING AND ANALYZING THE 

USE OF FEDERAL AGENCY CHARGE CARDS 

DECEMBER 8, 2015.—Ordered to be printed 


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(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin, Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

JONI ERNST, Iowa 

BEN SASSE, Nebraska 

THOMAS R. CARPER, Delaware 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

CORY A. BOOKER, New Jersey 

GARY C. PETERS, Michigan 

KEITH B. ASHDOWN, Staff Director 

CHRISTOPHER R. HIXON, Chief Counsel 

PATRICK J. BAILEY, Chief Counsel for Governmental Affairs 

GABRIELLE D’ADAMO SINGER, Deputy Chief Counsel for Governmental Affairs 

GABRIELLE A. BATKIN, Minority Staff Director 

JOHN P. KILVINGTON, Minority Deputy Staff Director 

MARY BETH SCHULTZ, Minority Chief Counsel 

PETER P. TYLER, Minority Senior Professional Staff Member 

LAURA W. KILBRIDE, Chief Clerk 


emcdonald on DSK67QTVN1PROD with HEARING
Calendar No. 315 

114TH CONGRESS SENATE REPORT " ! 1st Session 114–174 

SAVING FEDERAL DOLLARS THROUGH BETTER USE OF 

GOVERNMENT PURCHASE AND TRAVEL CARDS ACT OF 

2015 

DECEMBER 8, 2015.—Ordered to be printed 

Mr. JOHNSON, from the Committee on Homeland Security and 

Governmental Affairs, submitted the following 

R E P O R T 

[To accompany S. 1616] 

The Committee on Homeland Security and Governmental Affairs, 

to which was referred the bill (S. 1616) to provide for the identification and prevention of improper payments and the identification of 

strategic sourcing opportunities by reviewing and analyzing the use 

of Federal agency charge cards, having considered the same, reports favorably thereon without amendment and recommends that 

the bill do pass. 

CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 1 

II. Background and Need for the Legislation ................................................... 2 

III. Legislative History ......................................................................................... 4 

IV. Section-by-Section Analysis .......................................................................... 4 

V. Evaluation of Regulatory Impact .................................................................. 5 

VI. Congressional Budget Office Cost Estimate ................................................ 5 

VII. Changes in Existing Law Made by the Bill, as Reported ........................... 7 

I. PURPOSE AND SUMMARY

S. 1616 establishes an office within the General Services Administration (GSA) to review and analyze the use of charge cards by 

employees of the Federal government to identify trends of abuses 

of charge and travel cards as well as opportunities for strategic 

sourcing. The legislation also requires the Office of Management 

and Budget (OMB) to issue new guidance to agencies for the oversight and administration of Federal charge cards. In addition, S. 

1616 also establishes an interagency task force to develop and 


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1See, e.g., GOV’T ACCOUNTABILITY OFFICE, GAO–08–333, GOVERNMENTWIDE PURCHASE CARDS: 

ACTIONS NEEDED TO STRENGTHEN INTERNAL CONTROLS TO REDUCE FRAUDULENT, IMPROPER, AND

ABUSIVE PURCHASES (2008), available at http://www.gao.gov/new.items/d08333.pdf. 2DEPARTMENT OF DEFENSE OFFICE OF INSPECTOR GENERAL, DOD CARDHOLDERS USED THEIR

GOVERNMENT TRAVEL CARDS FOR PERSONAL USE AT CASINOS AND ADULT ENTERTAINMENT ESTABLISHMENTS (2015), available at http://www.dodig.mil/pubs/documents/DODIG-2015- 

125.pdf. 3DHS Purchase Cards: Credit without Accountability: Hearing Before the Comm. on Homeland 

Security and Governmental Affairs, 109th Cong. (2006), available at http:// 

www.hsgac.senate.gov/hearings/dhs-purchase-cards-credit-without-accountability. 4Gym Memberships, Gift Cards and Hair Salons: Examining the Misuse of Government-Supplied Credit Cards: Hearing Before the H. Subcomm. on Government Operations, 113th Cong. 

(2014), available at https://oversight.house.gov/hearing/gym-memberships-gift-cards-hair-salons-examining-misuse-government-supplied-credit-cards/. 5Lisa Rein, The mysterious case of $54 million VA spent on prosthetics in $24,999 payments, 

THE WASHINGTON POST (June 16, 2015), available at http://www.washingtonpost.com/blogs/ 

federal-eye/wp/2015/06/16/the-mysterious-case-of–54–million-va-spent-on-prosthetics-in-24999- 

payments/; Waste, Fraud, and Abuse in the VA Purchase Card Program: H. Comm. on Veterans 

Affairs, 114th Cong. (2015), available at https://veterans.house.gov/hearing/waste-fraud-andabuse-in-va-s-purchase-card-program. 6Pub. L. No. 112–94. 

share best practices, requires the development of an interagency library of analytics tools and data sets for use in managing charge 

card transactions, and sets requirements for GSA and other agencies to report to Congress on implementation of the bill. 

II. BACKGROUND AND THE NEED FOR LEGISLATION

The use of Federal agency purchase cards and travel cards poses 

ongoing challenges and opportunities. Improved oversight, controls 

and analysis of Federal charge card use could result in reduced improper payments and misuse. The Federal government could also 

improve the identification of strategic sourcing opportunities by 

analyzing charge card use for potential savings. 

Federal charge cards have been the subject of congressional hearings, Government Accountability Office reports1 and Office of Inspector General (OIG) reviews highlighting their misuse. For example, the misuse of government travel cards by the Department of 

Defense (DOD) employees at casinos and adult entertainment establishments was the subject of a DOD OIG report earlier this 

year.2 That OIG report detailed specific steps needed for improved 

oversight by the DOD, many of which could also be adopted by 

other agencies. Similar problems at the DOD spurred a 2006 Committee hearing,3 and a subcommittee of the House Oversight and 

Government Reform Committee also held a hearing on the use of 

Federal charge cards for high-end gym memberships, gift cards, 

and hair salons.4 The misuse of Federal purchase cards within the 

Department of Veterans Affairs, where cardholders at the agency 

appeared to have avoided using competitive bidding by breaking up 

large purchases into many smaller ones, was also the topic of news 

articles and a congressional hearing.5

The oversight of Federal purchase cards also has been a focus of 

recent legislation. In 2012, the Committee favorably reported the 

Government Charge Card Abuse Prevention Act, sponsored by Senator Charles Grassley, which was signed into law later that year.6

The law requires agencies to establish safeguards and internal controls for charge cards, including use of systems and technologies to 

identify illegal, improper, or erroneous purchases. The law also requires annual reporting by Federal agencies and OMB, as well as 


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7 Exec. Order No. 13681, available at https://www.whitehouse.gov/the-press-office/2014/10/ 

17/executive-order-improving-security-consumer-financial-transactions. 8OMB Circular A–123, App. B, available at https://www.whitehouse.gov/sites/default/files/ 

omb/assets/agencyinformation—circulars—pdf/a123—appendix—b.pdf. 9DEPARTMENT OF DEFENSE OFFICE OF INSPECTOR GENERAL, DOD CARDHOLDERS USED THEIR

GOVERNMENT TRAVEL CARDS FOR PERSONAL USE AT CASINOS AND ADULT ENTERTAINMENT ESTABLISHMENTS (2015), available at http://www.dodig.mil/pubs/documents/DODIG-2015- 

125.pdf. 

periodic risk assessments by Inspectors General of agency purchase 

card programs.. 

The White House and OMB have taken action to strengthen Federal charge card oversight during the past several years. The President signed Executive Order 13681, Improving the Security of Consumer Financial Transactions, which included the promotion of 

more secure charge card operations for Federal agencies.7 Also, the 

OMB Circular A–123 Appendix B, Improving the Management of 

Government Charge Card Programs, detailed improved policies and 

procedures for federal charge card programs.8

However, there is still a clear need for strengthening and improving Federal oversight and administration by Federal agencies 

of charge card programs. While agencies are required to individually develop new oversight techniques to detect misuse, there is 

no consistent method for Federal agencies to quickly share the 

identified fraud schemes or oversight techniques, such as those 

identified this year by the DOD OIG.9 In addition, not all government agencies have established robust data mining, or anti-waste 

and fraud analytics, for their charge card programs. The Federal 

government could also do a better job surveying agency-wide purchase card data to identify ways to improve efficiency, as well as 

taking aggressive efforts to recover inappropriately spent dollars. 

Of the two types of credit cards, travel cards and purchase cards, 

purchase cards present the greater risk to taxpayers. In most 

cases, individual employees are only reimbursed for authorized 

charges on travel cards and must pay for any unauthorized charges 

using their own personal funds. On the other hand, in most cases, 

agencies pay the entire monthly bill for purchase cards and can 

only identify unauthorized charges after they have already been 

paid. 

Still, travel card data presents insight into the travel patterns of 

agencies and can help GSA identify excess conference spending, 

first-class travel, and travel charges incurred near the employee’s 

home. Many of these charges may not be fraudulent, and likely 

were approved by supervisors. 

Similarly, purchase cards—due to the structured, electronic nature of the transactions—provide government-wide insight into 

small-dollar spending patterns that is not available elsewhere, such 

as USAspending.gov. GSA analysts can use this information to find 

ways to save money. 

The Saving Federal Dollars Through Better Use of Government 

Purchase and Travel Cards Act of 2015 would improve anti-waste 

and fraud analysis and facilitate the sharing of information about 

charge card abuse and best practices among federal agencies. The 

legislation would also establish procedures to identify strategic 

sourcing opportunities through analysis of Federal charge card 

transactions. 


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10Pub. L. No. 112–94. 11GOV’T ACCOUNTABILITY OFFICE, GAO–13–417, STRATEGIC SOURCING: LEADING COMMERCIAL

PRACTICES CAN HELP FEDERAL AGENCIES INCREASE SAVINGS WHEN ACQUIRING SERVICES (2013), 

available at http://www.gao.gov/products/GAO-13-417. 

The bill instructs the GSA to review charge card purchases. GSA 

already collects charge card transaction data in its administrative 

role of overseeing federal agency charge card programs. S. 1616 is 

intended to require GSA to assist agencies in their ongoing oversight responsibilities through the analysis of the transaction data. 

S. 1616 builds on the 2012 Government Charge Card Abuse Prevention Act, which required agencies to establish certain types of 

control and oversight over the agency’s charge card usage.10 Under 

S. 1616, GSA would assist agencies by conducting sophisticated, 

government-wide analysis for potential waste and fraud, without 

relieving agencies of the need to conduct their own scrutiny. Federal agencies would also share information about fraud schemes, 

high-risk sellers and other risks of charge card misuse. This way, 

agencies will learn from one another’s successes and mistakes. 

Finally, the legislation would facilitate analysis of governmentwide purchase card data spending patterns to better leverage Federal government purchasing power when buying in bulk. This is 

often called ‘‘strategic sourcing,’’ and has become a proven way to 

save taxpayer funds.11

III. LEGISLATIVE HISTORY

Ranking Member Tom Carper, Chairman Ron Johnson, and Senators Charles Grassley and Claire McCaskill, introduced S. 1616 on 

June 18, 2015, and the bill was referred to the Committee. 

The Committee considered S. 1616 at a business meeting on 

June 24, 2015. The Committee adopted the bill by voice vote. Members present for the vote on the bill were Senators Johnson, 

McCain, Lankford, Ayotte, Ernst, Sasse, Carper, Tester, Baldwin, 

and Heitkamp. 

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

Section 1. Short title 

This section establishes the bill’s title as the ‘‘Saving Federal 

Dollars Through Better Use of Government Purchase and Travel 

Cards Act of 2015.’’ 

Section 2. Definitions 

This section establishes definitions for ‘‘Strategic Sourcing’’ and 

‘‘Improper Payment.’’ 

Section 3. Office of Federal Charge Card Analytics and Review 

This section instructs GSA to establish an Office of Federal 

Charge Card Analytics and Review to use the charge card data it 

currently possesses to identify ways to save money. The bill is intended to provide flexibility for GSA to organize this function into 

an existing division, such as the Data Management division. 


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

This section instructs that, not later than 180 days after the date 

of the bill’s enactment, the Director of OMB, in consultation with 

the Administrator of GSA, agency heads, and the GSA task force 

created by Section 3, to issue guidance on carrying out Section 3 

which shall include: requiring agencies to identify and share information about high-risk merchants; (2) ensuring agencies are reviewing the reports of concerning transactions; (3) ensuring agencies are sharing information about fraud schemes with GSA’s task 

force and other agencies; and (4) any other requirements necessary 

to carry out the directives of the bill. 

Section 5. Interagency task force 

This section establishes an interagency task force to identify best 

practices related to charge card oversight by federal agencies. 

Section 6. Reporting requirements 

This section requires GSA and each covered agency to submit a 

report to Congress within one year on their compliance with this 

bill. 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact of this bill. The Committee concurs with the 

Congressional Budget Office, which states that the bill contains no 

intergovernmental or private-sector mandates as defined in the Unfunded Mandate Reform Act and would not affect state, local, and 

tribal governments. The enactment of this legislation will not have 

significant regulatory impact. 

VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

AUGUST 12, 2015. 

Hon. RON JOHNSON, 

Chairman, Committee on Homeland Security and Governmental 

Affairs, U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1616, the Saving Federal 

Dollars Through Better Use of Government Purchase and Travel 

Cards Act of 2015. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

KEITH HALL. 

Enclosure. 

S. 1616—Saving Federal Dollars Through Better Use of Government Purchase and Travel Cards Act of 2015 

Summary: S. 1616 would increase oversight of federal agencies’ 

use of purchase and travel cards. The legislation would establish 

an Office of Federal Charge Card Analytics and Review within the 

Government Services Administration (GSA) to examine purchases 

made using federal charge cards. Under S. 1616, GSA also would 


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establish an interagency task force to facilitate the sharing of information and to promote best practices to reduce fraud and improper 

payments. Finally, S. 1616 would require GSA to report to the Congress on the effectiveness of those efforts. 

Based on information from GSA regarding the current government charge card program, CBO estimates that implementing S. 

1616 would cost $65 million over the 2016–2020 period, assuming 

appropriation of the necessary amounts. Enacting S. 1616 would 

not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply. 

S. 1616 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would not affect the budgets of state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of S. 1616 is shown in the following table. The costs 

of this legislation fall within function 800 (general government). 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2016–2020 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level .............................. 10 15 15 15 10 65 

Estimated Outlays ................................................ 9 15 15 15 11 65 

Basis of estimate: For this estimate, CBO assumes that the bill 

will be enacted near the end of fiscal year 2015, that the necessary 

amounts will be appropriated each year, and that spending will follow historical patterns for federal salaries and expenses. 

Under current law and policy, agencies have many tools to combat fraud and misuse related to charge cards. Agencies have coordinators to oversee the use of charge cards; they also use tools such 

as credit limits, blocks on merchants based on the type of business, 

activity reports, and employee guides that explain best practices for 

using federal charge cards. In addition the 72 Inspector Generals 

(IG) and their 14,000 employees spend about $2.5 billion a year to 

detect and deter fraud, waste, and mismanagement of government 

funds. 

The legislation would expand the role of GSA in overseeing government-wide use of charge cards by establishing the Office of Federal Charge Card Analytics and Review. This new office would examine all charge card purchases made by federal employees and 

contractors with an aim to reduce improper purchases. 

Based on the costs to operate the Recovery Accountability and 

Transparency Board (Recovery Board), which sought to detect and 

prevent waste, fraud, and abuse of funds provided by the American 

Recovery and Reinvestment Act of 2009, CBO estimates that GSA 

would spend $65 million over the 2016–2020 period to monitor government charge card spending. Including start-up spending in 

2016, those amounts would fund the creation of an operations center with software to aggregate and analyze large volumes of charge 

card data. CBO expects that some costs to analyze the charge cards 

would diminish over time as some standardized work was developed. 

The proposed Office of Federal Charge Card Analytics and Review may detect additional waste, fraud, and abuse beyond what 


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is already identified by similar efforts under current law. Such efforts could result in savings. However, CBO has no basis for predicting whether the efforts of the new office would lead to a significant increase in the recovery of fraudulent payments, or would significantly reduce future instances of improper use of charge cards. 

Pay-As-You-Go considerations: None. 

Intergovernmental and private-sector impact: S. 1616 contains no 

intergovernmental or private-sector mandates as defined in UMRA 

and would not affect the budgets of state, local, or tribal governments. 

Estimate prepared by: Federal Costs: Matthew Pickford; Impact 

on state, local, and tribal governments: Paige Piper/Bach; Impact 

on the private sector: Jon Sperl. 

Estimate approved by: Theresa Gullo; Assistant Director for 

Budget Analysis. 

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

Because this legislation would not repeal or amend any provision 

of current law, it would make no changes in existing law within the 

meaning of clauses (a) and (b) of paragraph 12 of rule XXVI of the 

Standing Rules of the Senate. 

Æ 


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