I 

108TH CONGRESS 

1ST SESSION H. R. 3329

To prevent abuse of Government credit cards. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 16, 2003

Mr. WILSON of South Carolina (for himself, Mr. HENSARLING, Mrs. 

BLACKBURN, Mr. GOODE, Mrs. MYRICK, Mr. KINGSTON, Mr. CHOCOLA, 

Mr. BARRETT of South Carolina, Mr. PAUL, Mr. PLATTS, Mrs. 

MUSGRAVE, Mrs. NORTHUP, Mr. GREEN of Wisconsin, and Mr. PUTNAM) 

introduced the following bill; which was referred to the Committee on 

Government Reform, and in addition to the Committee on Armed Services, for a period to be subsequently determined by the Speaker, in each 

case for consideration of such provisions as fall within the jurisdiction of 

the committee concerned 

A BILL

To prevent abuse of Government credit cards.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Credit Card Abuse 

5 Prevention Act of 2003’’. 

6 SEC. 2. MANAGEMENT OF PURCHASE CARDS. 

7 (a) REQUIRED SAFEGUARDS AND INTERNAL CON8 TROLS.—The head of each executive agency that issues 
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1 and uses purchase cards and convenience checks shall es2 tablish and maintain safeguards and internal controls to 

3 ensure the following: 

4 (1) That there is a record in each executive 

5 agency of each holder of a purchase card issued by 

6 the agency for official use, annotated with the limi7 tations on single transaction and total credit 

8 amounts that are applicable to the use of each such 

9 card by that purchase cardholder. 

10 (2) That the holder of a purchase card and 

11 each official with authority to authorize expenditures 

12 charged to the purchase card are responsible for rec13 onciling the charges appearing on each statement of 

14 account for that purchase card with receipts and 

15 other supporting documentation and forwarding 

16 such reconciliation to the designated official who cer17 tifies the bill for payment in a timely manner. 

18 (3) That any disputed purchase card charge, 

19 and any discrepancy between a receipt and other 

20 supporting documentation and the purchase card 

21 statement of account, is resolved in the manner pre22 scribed in the applicable Governmentwide purchase 

23 card contract entered into by the Administrator of 

24 General Services. 
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1 (4) That payments on purchase card accounts 

2 are made promptly within prescribed deadlines to 

3 avoid interest penalties. 

4 (5) That rebates and refunds based on prompt 

5 payment on purchase card accounts are monitored 

6 for accuracy and properly recorded as a receipt to 

7 the agency that pays the monthly bill. 

8 (6) That records of each purchase card trans9 action (including records on associated contracts, re10 ports, accounts, and invoices) are retained in accord11 ance with standard Government policies on the dis12 position of records. 

13 (7) That periodic reviews are performed to de14 termine whether each purchase cardholder has a 

15 need for the purchase card. 

16 (8) That appropriate training is provided to 

17 each purchase cardholder and each official with re18 sponsibility for overseeing the use of purchase cards 

19 issued by an executive agency. 

20 (9) That each executive agency has specific 

21 policies regarding the number of purchase cards 

22 issued by various organizations and categories of or23 ganizations, the credit limits authorized for various 

24 categories of cardholders, and categories of employ25 ees eligible to be issued purchase cards, and that 
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1 those policies are designed to minimize the financial 

2 risk to the Federal Government of the issuance of 

3 the purchase cards and to ensure the integrity of 

4 purchase cardholders. 

5 (10) That the head of each executive agency 

6 evaluate the creditworthiness of an individual before 

7 issuing the individual a purchase card, and that no 

8 individual be issued a purchase card if the individual 

9 is found not creditworthy as a result of the evalua10 tion. Notwithstanding any other provision of law, 

11 such evaluation shall include an assessment of an in12 dividual’s consumer report from a consumer report13 ing agency as those terms are defined in section 603 

14 of the Fair Credit Reporting Act. The obtaining of 

15 a consumer report under this subsection is deemed 

16 to be a circumstance or purpose authorized or listed 

17 under section 604 of the Fair Credit Reporting Act. 

18 (11) That each executive agency invalidate the 

19 purchase card of each employee who—

20 (A) ceases to be employed by the agency 

21 immediately upon termination of the employ22 ment of the employee; or 

23 (B) transfers to another unit of the agency 

24 immediately upon the transfer of the employee. 
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1 (b) MANAGEMENT OF PURCHASE CARDS.—The head 

2 of each executive agency shall prescribe regulations imple3 menting the safeguards and internal controls in subsection 

4 (a). Those regulations shall be consistent with regulations 

5 that apply Governmentwide regarding the use of purchase 

6 cards by Government personnel for official purposes. 

7 (c) PENALTIES FOR VIOLATIONS.—The regulations 

8 prescribed under subsection (a) shall provide for appro9 priate adverse personnel actions or other punishment to 

10 be imposed in cases in which employees of an executive 

11 agency violate such regulations or are negligent or engage 

12 in misuse, abuse, or fraud with respect to a purchase card, 

13 including removal in appropriate cases. 

14 (d) The Inspector General of each executive agency 

15 shall—

16 (1) periodically conduct risk assessments of the 

17 agency purchase card program and associated inter18 nal controls and analyze identified weaknesses and 

19 the frequency of improper activity in order to de20 velop a plan for using such risk assessments to de21 termine the scope, frequency, and number of peri22 odic audits of purchase cardholders; 

23 (2) perform periodic audits of purchase card24 holders designed to identify—
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1 (A) potentially fraudulent, improper, and 

2 abusive uses of purchase cards; 

3 (B) any patterns of improper cardholder 

4 transactions, such as purchases of prohibited 

5 items; and 

6 (C) categories of purchases that should be 

7 made by means other than purchase cards in 

8 order to better aggregate purchases and obtain 

9 lower prices; 

10 (3) report to the head of the executive agency 

11 concerned on the results of such audits; and 

12 (4) report to the Director of the Office of Man13 agement and Budget and the Comptroller General 

14 on the implementation of recommendations made to 

15 the head of the executive agency to address findings 

16 during audits of purchase cardholders. 

17 (e) DEFINITION OF EXECUTIVE AGENCY.—For the 

18 purpose of this section the term ‘‘executive agency’’ has 

19 the meaning provided in section 4(1) of the Office of Fed20 eral Procurement Policy Act (41 U.S.C. 403(1)). 

21 (f) RELATIONSHIP TO DEPARTMENT OF DEFENSE

22 PURCHASE CARD REGULATIONS.—

23 (1) The requirements under this section shall 

24 not apply to the Department of Defense. 
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1 (2) Section 2784(b) of title 10, United States 

2 Code, is amended—

3 (A) in paragraph (8), by striking ‘‘periodic 

4 audits’’ and inserting ‘‘risk assessments of the 

5 agency purchase card program and associated 

6 internal controls and analyze identified weak7 nesses and the frequency of improper activity in 

8 order to develop a plan for using such risk as9 sessments to determine the scope, frequency, 

10 and number of periodic audits of purchase card11 holders.’’; and 

12 (B) by adding at the end the following new 

13 paragraphs: 

14 ‘‘(11) That the Secretary of Defense shall 

15 evaluate the creditworthiness of an individual before 

16 issuing the individual a purchase card, and that no 

17 individual be issued a purchase card if the individual 

18 is not found creditworthy as a result of the evalua19 tion. Notwithstanding any other provision of law, 

20 such evaluation shall include an assessment of an in21 dividual’s consumer report from a consumer report22 ing agency as those terms are defined in section 603 

23 of the Fair Credit Reporting Act. The obtaining of 

24 a consumer report under this subsection is deemed 
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1 to be a circumstance or purpose authorized or listed 

2 under section 604 of the Fair Credit Reporting Act. 

3 ‘‘(12) That the Secretary of Defense invalidate 

4 the purchase card of each employee who ceases to be 

5 employed by the department immediately upon ter6 mination of the employment of the employee or 

7 transfers to another agency or subunit within the 

8 department immediately upon transfer.’’. 

9 SEC. 3. MANAGEMENT OF TRAVEL CARDS. 

10 Section 2 of the Travel and Transportation Reform 

11 Act of 1998 (Public Law 105–264; 5 U.S.C. 5701 note) 

12 is amended by adding at the end the following new sub13 section: 

14 ‘‘(h) MANAGEMENT OF TRAVEL CHARGE CARDS.—

15 ‘‘(1) REQUIRED SAFEGUARDS AND INTERNAL

16 CONTROLS.—The head of each executive agency that 

17 has employees that use travel charge cards shall es18 tablish and maintain safeguards and internal con19 trols over travel charge cards to ensure the fol20 lowing: 

21 ‘‘(A) That there is a record in each execu22 tive agency of each holder of a travel charge 

23 card issued by the agency for official use, anno24 tated with the limitations on amounts that are 
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1 applicable to the use of each such card by that 

2 travel charge cardholder. 

3 ‘‘(B) That rebates and refunds based on 

4 prompt payment on travel charge card accounts 

5 are properly recorded as a receipt of the agency 

6 that employs the cardholder. 

7 ‘‘(C) That periodic reviews are performed 

8 to determine whether each travel charge card9 holder has a need for the travel charge card. 

10 ‘‘(D) That appropriate training is provided 

11 to each travel charge cardholder and each offi12 cial with responsibility for overseeing the use of 

13 travel charge cards issued by an executive agen14 cy. 

15 ‘‘(E) That each executive agency has spe16 cific policies regarding the number of travel 

17 charge cards issued by various organizations 

18 and categories of organizations, the credit limits 

19 authorized for various categories of cardholders, 

20 and categories of employees eligible to be issued 

21 travel charge cards, and that those policies are 

22 designed to minimize the financial risk to the 

23 Federal Government of the issuance of the trav24 el charge cards and to ensure the integrity of 

25 travel charge cardholders. 
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1 ‘‘(F) That the head of each executive agen2 cy evaluates the creditworthiness of an indi3 vidual before issuing the individual a travel 

4 charge card, and that no individual be issued a 

5 travel charge card if the individual is found not 

6 creditworthy as a result of the evaluation (ex7 cept that this paragraph shall not preclude 

8 issuance of a restricted use travel charge card 

9 when the individual lacks a credit history). Not10 withstanding any other provision of law, such 

11 evaluation shall include an assessment of an in12 dividual’s consumer report from a consumer re13 porting agency as those terms are defined in 

14 section 603 of the Fair Credit Reporting Act. 

15 The obtaining of a consumer report under this 

16 subsection is deemed to be a circumstance or 

17 purpose authorized or listed under section 604 

18 of the Fair Credit Reporting Act. 

19 ‘‘(G) That each executive agency ensures 

20 that the travel charge card of each employee 

21 who ceases to be employed by the agency is in22 validated immediately upon termination of the 

23 employment of the employee. 

24 ‘‘(2) REGULATIONS.—The Administrator of 

25 General Services shall prescribe regulations gov-
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1 erning the implementation of the safeguards and in2 ternal controls in paragraph (1) by executive agen3 cies. 

4 ‘‘(3) PENALTIES FOR VIOLATIONS.—The regu5 lations prescribed under paragraph (2) shall provide 

6 for appropriate adverse personnel actions or other 

7 punishment to be imposed in cases in which employ8 ees of an executive agency violate such regulations 

9 or are negligent or engage in misuse, abuse, or fraud 

10 with respect to a travel charge card, including re11 moval in appropriate cases. 

12 ‘‘(4) The Inspector General of each executive 

13 agency shall—

14 ‘‘(A) periodically conduct risk assessments 

15 of the agency travel card program and associ16 ated internal controls and analyze identified 

17 weaknesses and the frequency of improper ac18 tivity in order to develop a plan for using such 

19 risk assessments to determine the scope, fre20 quency, and number of periodic audits of pur21 chase cardholders; 

22 ‘‘(B) perform periodic audits of travel 

23 cardholders designed to identify potentially 

24 fraudulent, improper, and abusive uses of travel 

25 cards; 
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1 ‘‘(C) report to the head of the executive 

2 agency concerned on the results of such audits; 

3 and 

4 ‘‘(D) report to the Director of the Office of 

5 Management and Budget and the Comptroller 

6 General on the implementation of recommenda7 tions made to the head of the executive agency 

8 to address findings during audits of travel card9 holders. 

10 ‘‘(5) DEFINITIONS.—For purposes of this sub11 section: 

12 ‘‘(A) The term ‘executive agency’ means an 

13 agency as that term is defined in section 5701 

14 of title 5, United States Code, except that it is 

15 in the executive branch. 

16 ‘‘(B) The term ‘travel charge card’ means 

17 the Federal contractor-issued travel charge card 

18 that is individually billed to each cardholder.’’. 

19 SEC. 4. REGULATIONS. 

20 (a) IN GENERAL.—Not later than 180 days after the 

21 date of the enactment of this Act—

22 (1) the head of each executive agency shall pro23 mulgate regulations to implement the requirements 

24 of section 2; and 
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1 (2) the Administrator of General Services shall 

2 promulgate regulations required pursuant to the 

3 amendments made by section 3. 

4 (b) BEST PRACTICES.—Regulations promulgated 

5 under this section shall reflect best practices for con6 ducting purchase and travel card programs.

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