II 

112TH CONGRESS 

1ST SESSION S. 300 

To prevent abuse of Government charge cards. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 8, 2011 

Mr. GRASSLEY (for himself, Mr. LIEBERMAN, and Ms. COLLINS) introduced 

the following bill; which was read twice and referred to the Committee 

on Homeland Security and Governmental Affairs 

A BILL 

To prevent abuse of Government charge 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 Charge 

5 Card Abuse Prevention Act of 2011’’. 

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 es10 tablish and maintain safeguards and internal controls to 

11 ensure the following: 


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1 (1) There is a record in each executive agency 

2 of each holder of a purchase card issued by the 

3 agency for official use, annotated with the limita4 tions on single transactions and total transactions 

5 that are applicable to the use of each such card or 

6 check by that purchase cardholder. 

7 (2) Each purchase cardholder and individual 

8 issued a convenience check is assigned an approving 

9 official other than the cardholder with the authority 

10 to approve or disapprove transactions. 

11 (3) The holder of a purchase card and each of12 ficial with authority to authorize expenditures 

13 charged to the purchase card are responsible for— 

14 (A) reconciling the charges appearing on 

15 each statement of account for that purchase 

16 card with receipts and other supporting docu17 mentation; and 

18 (B) forwarding such reconciliation to the 

19 certifying official in a timely manner to enable 

20 the certifying official to ensure that the Federal 

21 Government ultimately pays only for valid 

22 charges. 

23 (4) Any disputed purchase card charge, and 

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1 ment of account, is resolved in the manner pre2 scribed in the applicable governmentwide purchase 

3 card contract entered into by the Administrator of 

4 General Services and in accordance with all laws and 

5 executive agency regulations. 

6 (5) Payments on purchase card accounts are 

7 made promptly within prescribed deadlines to avoid 

8 interest penalties. 

9 (6) Rebates and refunds based on prompt pay10 ment, sales volume, or other actions by the agency 

11 on purchase card accounts are reviewed for accuracy 

12 and properly recorded as a receipt to the agency 

13 that pays the monthly bill. 

14 (7) Records of each purchase card transaction 

15 (including records on associated contracts, reports, 

16 accounts, and invoices) are retained in accordance 

17 with standard Government policies on the disposition 

18 of records. 

19 (8) Periodic reviews are performed to determine 

20 whether each purchase cardholder has a need for the 

21 purchase card. 

22 (9) Appropriate training regarding the proper 

23 use of purchase cards is provided to each purchase 

24 cardholder in advance of being issued a purchase 

25 card and periodically thereafter and to each official 


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1 with responsibility for overseeing the use of purchase 

2 cards issued by an executive agency in advance of 

3 assuming such oversight duties and periodically 

4 thereafter. 

5 (10) The executive agency has specific policies 

6 regarding the number of purchase cards issued by 

7 various component organizations and categories of 

8 component organizations, the credit limits author9 ized for various categories of cardholders, and cat10 egories of employees eligible to be issued purchase 

11 cards, and that those policies are designed to mini12 mize the financial risk to the Federal Government of 

13 the issuance of the purchase cards and to ensure the 

14 integrity of purchase cardholders. 

15 (11) The executive agency utilizes effective sys16 tems, techniques, and technologies to prevent or 

17 identify fraudulent purchases. 

18 (12) The executive agency invalidates the pur19 chase 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 unless the agency determines that the units are 

2 covered by the same purchase card authority. 

3 (13) The executive agency takes steps to re4 cover the cost of any erroneous, improper, or illegal 

5 purchase made with a purchase card or convenience 

6 check by an employee, including, as necessary, 

7 through salary offsets. 

8 (b) GUIDANCE ON MANAGEMENT OF PURCHASE

9 CARDS.—Not later than 180 days after the date of the 

10 enactment of this Act, the Director of the Office of Man11 agement and Budget shall review the existing guidance 

12 and, as necessary, prescribe additional guidance governing 

13 the implementation of the safeguards and internal controls 

14 required by subsection (a) by executive agencies. 

15 (c) PENALTIES FOR VIOLATIONS.— 

16 (1) IN GENERAL.—The head of each executive 

17 agency shall provide for appropriate adverse per18 sonnel actions or other punishment to be imposed in 

19 cases in which employees of the agency violate agen20 cy policies implementing the guidance required by 

21 subsection (b) or make improper, erroneous, or ille22 gal purchases with purchase cards or convenience 

23 checks. 

24 (2) DISMISSAL.—Penalties prescribed for em25 ployee misuse of purchase cards or convenience 


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1 checks shall include dismissal of the employee, as 

2 appropriate. 

3 (3) REPORTS ON VIOLATIONS.—The guidance 

4 prescribed under subsection (b) shall direct each 

5 head of an executive agency with more than 

6 $10,000,000 in purchase card spending annually, 

7 and each Inspector General of such an executive 

8 agency on a semiannual basis, to submit to the Di9 rector of the Office of Management and Budget a 

10 joint report on violations or other actions covered by 

11 paragraph (1) by employees of such executive agen12 cy. At a minimum, the report shall set forth the fol13 lowing: 

14 (A) A description of each violation. 

15 (B) A description of any adverse personnel 

16 action, punishment, other action taken against 

17 the employee for such violation. 

18 (d) RISK ASSESSMENTS AND AUDITS.—The Inspec19 tor General of each executive agency shall— 

20 (1) conduct periodic assessments of the agency 

21 purchase card or convenience check programs to 

22 identify and analyze risks of illegal, improper, or er23 roneous purchases and payments in order to develop 

24 a plan for using such risk assessments to determine 


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1 the scope, frequency, and number of periodic audits 

2 of purchase card or convenience check transactions; 

3 (2) perform analysis or audits as necessary, of 

4 purchase card transactions designed to identify— 

5 (A) potentially illegal, improper, erroneous, 

6 and abusive uses of purchase cards; 

7 (B) any patterns of such uses; and 

8 (C) categories of purchases that could be 

9 made by means other than purchase cards in 

10 order to better aggregate purchases and obtain 

11 lower prices (excluding transactions made under 

12 card-based strategic sourcing arrangements); 

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

14 concerned on the results of such analysis or audits; 

15 and 

16 (4) report to the Director of the Office of Man17 agement and Budget on the implementation of rec18 ommendations made to the head of the executive 

19 agency to address findings of any analysis or audit 

20 of purchase card and convenience check transactions 

21 or programs for compilation and transmission by the 

22 Director to Congress and the Comptroller General. 

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

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

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


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1 Procurement Policy Act (41 U.S.C. 403(1)), except as 

2 provided under subsection (f)(1). 

3 (f) RELATIONSHIP TO DEPARTMENT OF DEFENSE

4 PURCHASE CARD REGULATIONS.— 

5 (1) IN GENERAL.—The requirements of sub6 sections (a) through (d) shall not apply to the De7 partment of Defense. 

8 (2) CONFORMING AMENDMENTS.—Section 2784 

9 of title 10, United States Code, is amended— 

10 (A) in subsection (b), by adding at the end 

11 the following new paragraphs: 

12 ‘‘(11) That each purchase cardholder and indi13 vidual issued a convenience check is assigned an ap14 proving official other than the cardholder with the 

15 authority to approve or disapprove transactions. 

16 ‘‘(12) That the Department of Defense utilizes 

17 effective systems, techniques, and technologies to 

18 prevent or identify fraudulent purchases. 

19 ‘‘(13) That the Department of Defense takes 

20 appropriate steps to invalidate the purchase card of 

21 each employee who— 

22 ‘‘(A) ceases to be employed by the Depart23 ment of Defense, immediately upon termination 

24 of the employment of the employee; or 


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1 ‘‘(B) transfers to another unit of the De2 partment of Defense immediately upon the 

3 transfer of the employee unless the Secretary of 

4 Defense determines that the units are covered 

5 by the same purchase card authority. 

6 ‘‘(14) That the Department of Defense takes 

7 appropriate steps to recover the cost of any erro8 neous, improper, or illegal purchase made with a 

9 purchase card or convenience check by an employee, 

10 including, as necessary, through salary offsets. 

11 ‘‘(15) That the Inspector General of the De12 partment of Defense conducts periodic assessments 

13 of purchase card or convenience check programs to 

14 identify and analyze risks of illegal, improper, or er15 roneous purchases and payments and uses such risk 

16 assessments to develop appropriate recommendations 

17 for corrective actions.’’; and 

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

19 subsection: 

20 ‘‘(d) SEMIANNUAL REPORT.—The Secretary of De21 fense and the Inspector General of the Department of De22 fense, shall submit to the Director of the Office of Man23 agement and Budget on a semiannual basis a joint report 

24 on illegal, improper, or erroneous purchases and payments 

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1 ployees of the Department of Defense. At a minimum, the 

2 report shall include the following: 

3 ‘‘(1) A description of each violation. 

4 ‘‘(2) A description of any adverse personnel ac5 tion, punishment, or other action taken against the 

6 employee for such violation. 

7 ‘‘(3) A description of actions taken by the De8 partment of Defense to address recommendations 

9 made to address findings arising out of risk assess10 ments and audits conducted pursuant to this sec11 tion.’’. 

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 the following internal control 

22 activities to ensure the proper, efficient, and effec23 tive use of such travel charge cards: 

24 ‘‘(A) There is a record in each executive 

25 agency of each holder of a travel charge card 


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1 issued on behalf of the agency for official use, 

2 annotated with the limitations on amounts that 

3 are applicable to the use of each such card by 

4 that travel charge cardholder. 

5 ‘‘(B) Rebates and refunds based on 

6 prompt payment, sales volume, or other actions 

7 by the agency on travel charge card accounts 

8 are monitored for accuracy and properly re9 corded as a receipt of the agency that employs 

10 the cardholder. 

11 ‘‘(C) Periodic reviews are performed to de12 termine whether each travel charge cardholder 

13 has a need for the travel charge card. 

14 ‘‘(D) Appropriate training is provided to 

15 each travel charge cardholder and each official 

16 with responsibility for overseeing the use of 

17 travel charge cards issued by an executive agen18 cy. 

19 ‘‘(E) Each executive agency has specific 

20 policies regarding the number of travel charge 

21 cards issued for various component organiza22 tions and categories of component organiza23 tions, the credit limits authorized for various 

24 categories of cardholders, and categories of em25 ployees eligible to be issued travel charge cards, 


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1 and designs those policies to minimize the fi2 nancial risk to the Federal Government of the 

3 issuance of the travel charge cards and to en4 sure the integrity of travel charge cardholders. 

5 ‘‘(F) Each executive agency ensures its 

6 contractual arrangement with each servicing 

7 travel charge card issuing contractor contains a 

8 requirement to evaluate the creditworthiness of 

9 an individual before issuing that individual a 

10 travel charge card, and that no individual be 

11 issued a travel charge card if that individual is 

12 found not creditworthy as a result of the eval13 uation (except that this paragraph shall not 

14 preclude issuance of a restricted use travel 

15 charge card or pre-paid card when the indi16 vidual lacks a credit history or has a credit 

17 score below the minimum credit score estab18 lished by the Office of Management and Budg19 et). The Director of the Office of Management 

20 and Budget shall establish a minimum credit 

21 score for determining the creditworthiness of an 

22 individual based on rigorous statistical analysis 

23 of the population of cardholders and historical 

24 behaviors. Notwithstanding any other provision 

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1 ment of an individual’s consumer report from a 

2 consumer reporting agency as those terms are 

3 defined in section 603 of the Fair Credit Re4 porting Act. 

5 ‘‘(G) Each executive agency utilizes effec6 tive systems, techniques, and technologies to 

7 prevent or identify improper purchases. 

8 ‘‘(H) Each executive agency ensures that 

9 the travel charge card of each employee who 

10 ceases to be employed by the agency is invali11 dated immediately upon termination of the em12 ployment of the employee. 

13 ‘‘(I) Each executive agency utilizes, where 

14 appropriate, direct payment to the holder of the 

15 travel card contract. 

16 ‘‘(2) GUIDANCE ON MANAGEMENT OF TRAVEL

17 CHARGE CARDS.—Not later than 180 days after the 

18 date of the enactment of the Government Charge 

19 Card Abuse Prevention Act of 2011, the Director of 

20 the Office of Management and Budget shall review 

21 the existing guidance and, as necessary, prescribe 

22 additional guidance for executive agencies governing 

23 the implementation of the requirements in para24 graph (1). 

25 ‘‘(3) PENALTIES FOR VIOLATIONS.— 


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1 ‘‘(A) IN GENERAL.—Consistent with the 

2 guidance prescribed under paragraph (2), each 

3 executive agency shall provide for appropriate 

4 adverse personnel actions to be imposed in 

5 cases in which employees of the executive agen6 cy fail to comply with applicable travel charge 

7 card terms and conditions or applicable agency 

8 regulations or commit fraud with respect to a 

9 travel charge card, including removal in appro10 priate cases. 

11 ‘‘(B) REPORTS ON VIOLATIONS.—The 

12 guidance prescribed under paragraph (2) shall 

13 require each head of an executive agency with 

14 more than $10,000,000 in travel card spending 

15 annually, and each inspector general of such an 

16 executive agency, on a semiannual basis, to sub17 mit to the Director of the Office of Manage18 ment and Budget a joint report on violations or 

19 other actions covered by subparagraph (A) by 

20 employees of such executive agency. At a min21 imum, the report shall set forth the following: 

22 ‘‘(i) A description of each violation. 

23 ‘‘(ii) A description of any adverse per24 sonnel action, punishment, or other action 


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1 taken against the employee for such viola2 tion or other action. 

3 ‘‘(4) RISK ASSESSMENTS AND AUDITS.—The in4 spector general of each executive agency shall— 

5 ‘‘(A) conduct periodic assessments of the 

6 agency travel charge card program and associ7 ated internal controls to identify and analyze 

8 risks of illegal, improper, or erroneous travel 

9 charges and payments in order to develop a 

10 plan for using such risk assessments to deter11 mine the scope, frequency, and number of peri12 odic audits of travel charge card transactions; 

13 ‘‘(B) perform periodic analysis and audits, 

14 as appropriate, of travel charge card trans15 actions designed to identify potentially im16 proper, erroneous, and illegal uses of travel 

17 charge cards; 

18 ‘‘(C) report to the head of the executive 

19 agency concerned on the results of such anal20 ysis and audits; and 

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

22 Management and Budget on the implementa23 tion of recommendations made to the head of 

24 the executive agency to address findings of any 

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1 actions or programs for compilation and trans2 mission by the Director to Congress and the 

3 Comptroller General. 

4 ‘‘(5) DEFINITIONS.—In this subsection: 

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

6 agency as that term is defined in subpara7 graphs (A) and (B) of section 5701(1) of title 

8 5, United States Code. 

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

10 any Federal contractor-issued travel charge 

11 card that is individually billed to each card12 holder.’’. 

13 SEC. 4. MANAGEMENT OF CENTRALLY BILLED ACCOUNTS. 

14 (a) REQUIRED INTERNAL CONTROLS FOR CEN15 TRALLY BILLED ACCOUNTS.—The head of an executive 

16 agency that has employees who use a travel charge card 

17 that is billed directly to the United States Government 

18 shall establish and maintain the following internal control 

19 activities: 

20 (1) Items submitted on an employee’s travel 

21 voucher shall be compared with items paid for using 

22 a centrally billed account on any related travel to en23 sure that an employee is not reimbursed for an item 

24 already paid for by the United States Government 

25 through a centrally billed account. 


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1 (2) The executive agency shall dispute unallow2 able and erroneous charges and track the status of 

3 the disputed transactions to ensure appropriate reso4 lution. 

5 (3) The executive agency shall submit requests 

6 to servicing airlines for refunds of fully or partially 

7 unused tickets, when entitled to such refunds, and 

8 track the status of unused tickets to ensure appro9 priate resolution. 

10 (b) GUIDANCE.—Not later than 180 days after the 

11 date of the enactment of this Act, the Director of the Of12 fice of Management and Budget shall review the existing 

13 guidance and, as necessary, prescribe additional guidance 

14 for executive agencies implementing the requirements of 

15 subsection (a). 

16 SEC. 5. CONSTRUCTION. 

17 Nothing in this Act shall be construed to excuse the 

18 head of an executive agency from the responsibilities set 

19 out in section 3512 of title 31, United States Code, or 

20 in the Improper Payments Act of 2002 (31 U.S.C. 3321 

21 note). 

Æ 


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