I 

109TH CONGRESS 

2D SESSION H. R. 5581 

To prevent abuse of Government credit cards. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 9, 2006 

Mr. WILSON of South Carolina 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 ‘‘Government Credit 

5 Card Abuse Prevention Act of 2006’’. 

6 SEC. 2. MANAGEMENT OF PURCHASE CARDS. 

7 (a) REQUIRED SAFEGUARDS AND INTERNAL CON8 TROLS.—The head of each executive agency that issues 

9 and uses purchase cards and convenience checks shall esVerDate Aug 31 2005 22:10 Jun 11, 2006 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5581.IH H5581

sroberts on PROD1PC70 with BILLS
2 

•HR 5581 IH

1 tablish and maintain safeguards and internal controls to 

2 ensure the following: 

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

4 agency of each holder of a purchase card issued by 

5 the agency for official use, annotated with the limi6 tations on single transaction and total credit 

7 amounts that are applicable to the use of each such 

8 card by that purchase cardholder. 

9 (2) That each purchase card holder is assigned 

10 an approving official other than the card holder with 

11 the authority to approve or disapprove expenditures. 

12 (3) That the holder of a purchase card and 

13 each official with authority to authorize expenditures 

14 charged to the purchase card are responsible for— 

15 (A) reconciling the charges appearing on 

16 each statement of account for that purchase 

17 card with receipts and other supporting docu18 mentation; and 

19 (B) forwarding such reconciliation to the 

20 designated official who certifies the bill for pay21 ment in a timely manner. 

22 (4) That any disputed purchase card charge, 

23 and any discrepancy between a receipt and other 

24 supporting documentation and the purchase card 

25 statement of account, is resolved in the manner preVerDate Aug 31 2005 02:30 Jun 10, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5581.IH H5581

sroberts on PROD1PC70 with BILLS
3 

•HR 5581 IH

1 scribed in the applicable Governmentwide purchase 

2 card contract entered into by the Administrator of 

3 General Services. 

4 (5) That payments on purchase card accounts 

5 are made promptly within prescribed deadlines to 

6 avoid interest penalties. 

7 (6) That rebates and refunds based on prompt 

8 payment on purchase card accounts are monitored 

9 for accuracy and properly recorded as a receipt to 

10 the agency that pays the monthly bill. 

11 (7) That records of each purchase card trans12 action (including records on associated contracts, re13 ports, accounts, and invoices) are retained in accord14 ance with standard Government policies on the dis15 position of records. 

16 (8) That periodic reviews are performed to de17 termine whether each purchase cardholder has a 

18 need for the purchase card. 

19 (9) That appropriate training is provided to 

20 each purchase cardholder and each official with re21 sponsibility for overseeing the use of purchase cards 

22 issued by an executive agency. 

23 (10) That the executive agency has specific poli24 cies regarding the number of purchase cards issued 

25 by various organizations and categories of organizaVerDate Aug 31 2005 02:30 Jun 10, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5581.IH H5581

sroberts on PROD1PC70 with BILLS
4 

•HR 5581 IH

1 tions, the credit limits authorized for various cat2 egories of cardholders, and categories of employees 

3 eligible to be issued purchase cards, and that those 

4 policies are designed to minimize the financial risk 

5 to the Federal Government of the issuance of the 

6 purchase cards and to ensure the integrity of pur7 chase cardholders. 

8 (11) That the executive agency utilizes tech9 nologies to prevent or identify fraudulent purchases, 

10 including controlling merchant codes and utilizing 

11 statistical machine learning and pattern recognition 

12 technologies that review the risk of every trans13 action. 

14 (12) That the executive agency invalidates the 

15 purchase card of each employee who— 

16 (A) ceases to be employed by the agency 

17 immediately upon termination of the employ18 ment of the employee; or 

19 (B) transfers to another unit of the agency 

20 immediately upon the transfer of the employee. 

21 (13) That the executive agency takes steps to 

22 recover the cost of any improper or fraudulent pur23 chase made by an employee, including, as necessary, 

24 through salary offsets. 


sroberts on PROD1PC70 with BILLS
5 

•HR 5581 IH

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). The 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 (b) 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 imposition of the following penalties: 

14 (1) In the case of an employee who is suspected 

15 by the executive agency to have engaged in fraud, 

16 referral of the case to the United States Attorney 

17 with jurisdiction over the matter. 

18 (2) In the case of an employee who is found 

19 guilty of fraud or found by the executive agency to 

20 have egregiously abused a purchase card, dismissal 

21 of the employee. 

22 (d) RISK ASSESSMENTS AND AUDITS.—The Inspec23 tor General of each executive agency shall— 

24 (1) periodically conduct risk assessments of the 

25 agency purchase card program and associated interVerDate Aug 31 2005 02:30 Jun 10, 2006 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5581.IH H5581

sroberts on PROD1PC70 with BILLS
6 

•HR 5581 IH

1 nal controls and analyze identified weaknesses and 

2 the frequency of improper activity in order to de3 velop a plan for using such risk assessments to de4 termine the scope, frequency, and number of peri5 odic audits of purchase cardholders; 

6 (2) perform periodic audits of purchase card7 holders designed to identify— 

8 (A) potentially fraudulent, improper, and 

9 abusive uses of purchase cards; 

10 (B) any patterns of improper cardholder 

11 transactions, such as purchases of prohibited 

12 items; and 

13 (C) categories of purchases that should be 

14 made by means other than purchase cards in 

15 order to better aggregate purchases and obtain 

16 lower prices; 

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

18 concerned on the results of such audits; and 

19 (4) report to the Director of the Office of Man20 agement and Budget and the Comptroller General 

21 on the implementation of recommendations made to 

22 the head of the executive agency to address findings 

23 during audits of purchase cardholders. 

24 (e) DEFINITION OF EXECUTIVE AGENCY.—In this 

25 section, the term ‘‘executive agency’’ has the meaning 


sroberts on PROD1PC70 with BILLS
7 

•HR 5581 IH

1 given such term in section 4(1) of the Office of Federal 

2 Procurement Policy Act (41 U.S.C. 403(1)). 

3 (f) RELATIONSHIP TO DEPARTMENT OF DEFENSE

4 PURCHASE CARD REGULATIONS.— 

5 (1) Except as provided under paragraph (2), 

6 the requirements under this section shall not apply 

7 to the Department of Defense. 

8 (2) Section 2784(b) of title 10, United States 

9 Code, is amended— 

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

11 audits’’ and all that follows through the period 

12 at the end and inserting ‘‘risk assessments of 

13 the agency purchase card program and associ14 ated internal controls and analyze identified 

15 weaknesses and the frequency of improper ac16 tivity in order to develop a plan for using such 

17 risk assessments to determine the scope, fre18 quency, and number of periodic audits of pur19 chase cardholders.’’; and 

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

21 paragraphs: 

22 ‘‘(11) That the Department of Defense utilizes 

23 technologies to prevent or identify fraudulent pur24 chases, including controlling merchant codes and uti25 lizing statistical machine learning and pattern recVerDate Aug 31 2005 02:30 Jun 10, 2006 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5581.IH H5581

sroberts on PROD1PC70 with BILLS
8 

•HR 5581 IH

1 ognition technologies that review the risk of every 

2 transaction. 

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

4 ‘‘(A) invalidates the purchase card of each 

5 employee who ceases to be employed by the De6 partment of Defense immediately upon termi7 nation of the employment of the employee; and 

8 ‘‘(B) invalidates the purchase card of each 

9 employee who transfers to another agency or 

10 subunit within the Department of Defense im11 mediately upon such transfer.’’. 

12 SEC. 3. MANAGEMENT OF TRAVEL CARDS. 

13 Section 2 of the Travel and Transportation Reform 

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

15 is amended by adding at the end the following new sub16 section: 

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

18 ‘‘(1) REQUIRED SAFEGUARDS AND INTERNAL

19 CONTROLS.—The head of each executive agency that 

20 has employees that use travel charge cards shall es21 tablish and maintain safeguards and internal con22 trols over travel charge cards to ensure the fol23 lowing: 

24 ‘‘(A) That there is a record in each execu25 tive agency of each holder of a travel charge 


sroberts on PROD1PC70 with BILLS
9 

•HR 5581 IH

1 card issued by the agency for official use, anno2 tated with the limitations on amounts that are 

3 applicable to the use of each such card by that 

4 travel charge cardholder. 

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

6 prompt payment on travel charge card accounts 

7 are properly recorded as a receipt of the agency 

8 that employs the cardholder. 

9 ‘‘(C) That periodic reviews are performed 

10 to determine whether each travel charge card11 holder has a need for the travel charge card. 

12 ‘‘(D) That appropriate training is provided 

13 to each travel charge cardholder and each offi14 cial with responsibility for overseeing the use of 

15 travel charge cards issued by an executive agen16 cy. 

17 ‘‘(E) That each executive agency has spe18 cific policies regarding the number of travel 

19 charge cards issued by various organizations 

20 and categories of organizations, the credit limits 

21 authorized for various categories of cardholders, 

22 and categories of employees eligible to be issued 

23 travel charge cards, and that those policies are 

24 designed to minimize the financial risk to the 

25 Federal Government of the issuance of the travVerDate Aug 31 2005 02:30 Jun 10, 2006 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5581.IH H5581

sroberts on PROD1PC70 with BILLS
10 

•HR 5581 IH

1 el charge cards and to ensure the integrity of 

2 travel charge cardholders. 

3 ‘‘(F) That the head of each executive agen4 cy negotiates with the holder of the applicable 

5 travel card contract, or a third party provider 

6 of credit evaluations if such provider offers 

7 more favorable terms, to evaluate the credit8 worthiness of an individual before issuing the 

9 individual a travel charge card, and that no in10 dividual be issued a travel charge card if the in11 dividual is found not creditworthy as a result of 

12 the evaluation (except that this paragraph shall 

13 not preclude issuance of a restricted use travel 

14 charge card when the individual lacks a credit 

15 history or the issuance of a pre-paid card when 

16 the individual has a credit score below the min17 imum credit score established by the agency). 

18 Each executive agency shall establish a min19 imum credit score for determining the credit20 worthiness of an individual based on rigorous 

21 statistical analysis of the population of card22 holders and historical behaviors. Notwith23 standing any other provision of law, such eval24 uation shall include an assessment of an indi25 vidual’s consumer report from a consumer reVerDate Aug 31 2005 02:30 Jun 10, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5581.IH H5581

sroberts on PROD1PC70 with BILLS
11 

•HR 5581 IH

1 porting agency as those terms are defined in 

2 section 603 of the Fair Credit Reporting Act. 

3 The obtaining of a consumer report under this 

4 subsection is deemed to be a circumstance or 

5 purpose authorized or listed under section 604 

6 of the Fair Credit Reporting Act. 

7 ‘‘(G) That each executive agency utilizes 

8 technologies to prevent or identify fraudulent 

9 purchases, including controlling merchant codes 

10 and utilizing statistical machine learning and 

11 pattern recognition technologies that review the 

12 risk of every transaction. 

13 ‘‘(H) That each executive agency ensures 

14 that the travel charge card of each employee 

15 who ceases to be employed by the agency is in16 validated immediately upon termination of the 

17 employment of the employee. 

18 ‘‘(I) That each executive agency utilizes 

19 mandatory split disbursements for travel card 

20 purchases. 

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

22 General Services shall prescribe regulations gov23 erning the implementation of the safeguards and in24 ternal controls in paragraph (1) by executive agen25 cies. 


sroberts on PROD1PC70 with BILLS
12 

•HR 5581 IH

1 ‘‘(3) PENALTIES FOR VIOLATIONS.—The regu2 lations prescribed under paragraph (2) shall provide 

3 for appropriate adverse personnel actions or other 

4 punishment to be imposed in cases in which employ5 ees of an executive agency violate such regulations 

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

7 with respect to a travel charge card, including re8 moval in appropriate cases. 

9 ‘‘(4) INSPECTOR GENERAL REQUIREMENTS.— 

10 The Inspector General of each executive agency 

11 shall— 

12 ‘‘(A) periodically conduct risk assessments 

13 of the agency travel card program and associ14 ated internal controls and analyze identified 

15 weaknesses and the frequency of improper ac16 tivity in order to develop a plan for using such 

17 risk assessments to determine the scope, fre18 quency, and number of periodic audits of pur19 chase cardholders; 

20 ‘‘(B) perform periodic audits of travel 

21 cardholders designed to identify potentially 

22 fraudulent, improper, and abusive uses of travel 

23 cards; 


sroberts on PROD1PC70 with BILLS
13 

•HR 5581 IH

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.—In this subsection: 

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

12 agency as that term is defined in section 5701 

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

14 in the executive branch. 

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

16 the Federal contractor-issued travel charge card 

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

18 SEC. 4. MANAGEMENT OF CENTRALLY BILLED ACCOUNTS. 

19 The head of an executive agency that has employees 

20 who use a centrally billed account shall establish and 

21 maintain safeguards and internal controls to ensure the 

22 following: 

23 (1) That items submitted on an employee’s 

24 travel voucher are compared with items paid for 

25 using a centrally billed account to ensure that an 


sroberts on PROD1PC70 with BILLS
14 

•HR 5581 IH

1 employee is not reimbursed for an item already paid 

2 for through a centrally billed account. 

3 (2) That the executive agency submits requests 

4 for refunds for unauthorized purchases to the holder 

5 of the applicable contract for a centrally billed ac6 count. 

7 (3) That the executive agency submits requests 

8 for refunds for fully or partially unused tickets to 

9 the holder of the applicable contract for a centrally 

10 billed account. 

11 SEC. 5. REGULATIONS. 

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

13 date of the enactment of this Act— 

14 (1) the head of each executive agency shall pro15 mulgate regulations to implement the requirements 

16 of sections 2 and 4; and 

17 (2) the Administrator of General Services shall 

18 promulgate regulations required pursuant to the 

19 amendments made by section 3. 

20 (b) BEST PRACTICES.—Regulations promulgated 

21 under this section shall reflect best practices for con22 ducting purchase card and travel card programs. 

Æ 


sroberts on PROD1PC70 with BILLS