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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 300 Reported in Senate (RS)]

                                                       Calendar No. 104
112th CONGRESS
  1st Session
                                 S. 300

                          [Report No. 112-37]

              To prevent abuse of Government charge cards.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            February 8, 2011

Mr. Grassley (for himself, Mr. Lieberman, Ms. Collins, Mr. Tester, and 
  Mr. Carper) introduced the following bill; which was read twice and 
referred to the Committee on Homeland Security and Governmental Affairs

                             July 18, 2011

               Reported by Mr. Lieberman, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL

 
              To prevent abuse of Government charge cards.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Government Charge Card Abuse 
Prevention Act of 2011''.

SEC. 2. MANAGEMENT OF PURCHASE CARDS.

    (a) Required Safeguards and Internal Controls.--The head of each 
executive agency that issues and uses purchase cards and convenience 
checks shall establish and maintain safeguards and internal controls to 
ensure the following:
            (1) There is a record in each executive agency of each 
        holder of a purchase card issued by the agency for official 
        use, annotated with the limitations on single transactions and 
        total transactions that are applicable to the use of each such 
        card or check by that purchase cardholder.
            (2) Each purchase cardholder and individual issued a 
        convenience check is assigned an approving official other than 
        the cardholder with the authority to approve or disapprove 
        transactions.
            (3) The holder of a purchase card and each official with 
        authority to authorize expenditures charged to the purchase 
        card are responsible for--
                    (A) reconciling the charges appearing on each 
                statement of account for that purchase card with 
                receipts and other supporting documentation; and
                    (B) forwarding such reconciliation to the 
                certifying official in a timely manner to enable the 
                certifying official to ensure that the Federal 
                Government ultimately pays only for valid charges.
            (4) Any disputed purchase card charge, and any discrepancy 
        between a receipt and other supporting documentation and the 
        purchase card statement of account, is resolved in the manner 
        prescribed in the applicable governmentwide purchase card 
        contract entered into by the Administrator of General Services 
        and in accordance with all laws and executive agency 
        regulations.
            (5) Payments on purchase card accounts are made promptly 
        within prescribed deadlines to avoid interest penalties.
            (6) Rebates and refunds based on prompt payment, sales 
        volume, or other actions by the agency on purchase card 
        accounts are reviewed for accuracy and properly recorded as a 
        receipt to the agency that pays the monthly bill.
            (7) Records of each purchase card transaction (including 
        records on associated contracts, reports, accounts, and 
        invoices) are retained in accordance with standard Government 
        policies on the disposition of records.
            (8) Periodic reviews are performed to determine whether 
        each purchase cardholder has a need for the purchase card.
            (9) Appropriate training regarding the proper use of 
        purchase cards is provided to each purchase cardholder in 
        advance of being issued a purchase card and periodically 
        thereafter and to each official with responsibility for 
        overseeing the use of purchase cards issued by an executive 
        agency in advance of assuming such oversight duties and 
        periodically thereafter.
            (10) The executive agency has specific policies regarding 
        the number of purchase cards issued by various component 
        organizations and categories of component organizations, the 
        credit limits authorized for various categories of cardholders, 
        and categories of employees eligible to be issued purchase 
        cards, and that those policies are designed to minimize the 
        financial risk to the Federal Government of the issuance of the 
        purchase cards and to ensure the integrity of purchase 
        cardholders.
            (11) The executive agency utilizes effective systems, 
        techniques, and technologies to prevent or identify fraudulent 
        purchases.
            (12) The executive agency invalidates the purchase card of 
        each employee who--
                    (A) ceases to be employed by the agency, 
                immediately upon termination of the employment of the 
                employee; or
                    (B) transfers to another unit of the agency 
                immediately upon the transfer of the employee unless 
                the agency determines that the units are covered by the 
                same purchase card authority.
            (13) The executive agency takes steps to recover the cost 
        of any erroneous, improper, or illegal purchase made with a 
        purchase card or convenience check by an employee, including, 
        as necessary, through salary offsets.
    (b) Guidance on Management of Purchase Cards.--Not later than 180 
days after the date of the enactment of this Act, the Director of the 
Office of Management and Budget shall review the existing guidance and, 
as necessary, prescribe additional guidance governing the 
implementation of the safeguards and internal controls required by 
subsection (a) by executive agencies.
    (c) Penalties for Violations.--
            (1) In general.--The head of each executive agency shall 
        provide for appropriate adverse personnel actions or other 
        punishment to be imposed in cases in which employees of the 
        agency violate agency policies implementing the guidance 
        required by subsection (b) or make improper, erroneous, or 
        illegal purchases with purchase cards or convenience checks.
            (2) Dismissal.--Penalties prescribed for employee misuse of 
        purchase cards or convenience checks shall include dismissal of 
        the employee, as appropriate.
            (3) Reports on violations.--The guidance prescribed under 
        subsection (b) shall direct each head of an executive agency 
        with more than $10,000,000 in purchase card spending annually, 
        and each Inspector General of such an executive agency, on a 
        semiannual basis, to submit to the Director of the Office of 
        Management and Budget a joint report on violations or other 
        actions covered by paragraph (1) by employees of such executive 
        agency. At a minimum, the report shall set forth the following:
                    (A) A description of each violation.
                    (B) A description of any adverse personnel action, 
                punishment, other action taken against the employee for 
                such violation.
    (d) Risk Assessments and Audits.--The Inspector General of each 
executive agency shall--
            (1) conduct periodic assessments of the agency purchase 
        card or convenience check programs to identify and analyze 
        risks of illegal, improper, or erroneous purchases and payments 
        in order to develop a plan for using such risk assessments to 
        determine the scope, frequency, and number of periodic audits 
        of purchase card or convenience check transactions;
            (2) perform analysis or audits, as necessary, of purchase 
        card transactions designed to identify--
                    (A) potentially illegal, improper, erroneous, and 
                abusive uses of purchase cards;
                    (B) any patterns of such uses; and
                    (C) categories of purchases that could be made by 
                means other than purchase cards in order to better 
                aggregate purchases and obtain lower prices (excluding 
                transactions made under card-based strategic sourcing 
                arrangements);
            (3) report to the head of the executive agency concerned on 
        the results of such analysis or audits; and
            (4) report to the Director of the Office of Management and 
        Budget on the implementation of recommendations made to the 
        head of the executive agency to address findings of any 
        analysis or audit of purchase card and convenience check 
        transactions or programs for compilation and transmission by 
        the Director to Congress and the Comptroller General.
    (e) Definition of Executive Agency.--In this section, the term 
``executive agency'' has the meaning given such term in section 
<DELETED>4(1) of the Office of Federal Procurement Policy Act (41 
U.S.C. 403(1))</DELETED> 133 of title 41, United States Code, except as 
provided under subsection (f)(1).
    (f) Relationship to Department of Defense Purchase Card 
Regulations.--
            (1) In general.--The requirements of subsections (a) 
        through (d) shall not apply to the Department of Defense.
            (2) Conforming amendments.--Section 2784 of title 10, 
        United States Code, is amended--
                    (A) in subsection (b), by adding at the end the 
                following new paragraphs:
            ``(11) That each purchase cardholder and individual issued 
        a convenience check is assigned an approving official other 
        than the cardholder with the authority to approve or disapprove 
        transactions.
            ``(12) That the Department of Defense utilizes effective 
        systems, techniques, and technologies to prevent or identify 
        fraudulent purchases.
            ``(13) That the Department of Defense takes appropriate 
        steps to invalidate the purchase card of each employee who--
                    ``(A) ceases to be employed by the Department of 
                Defense, immediately upon termination of the employment 
                of the employee; or
                    ``(B) transfers to another unit of the Department 
                of Defense immediately upon the transfer of the 
                employee unless the Secretary of Defense determines 
                that the units are covered by the same purchase card 
                authority.
            ``(14) That the Department of Defense takes appropriate 
        steps to recover the cost of any erroneous, improper, or 
        illegal purchase made with a purchase card or convenience check 
        by an employee, including, as necessary, through salary 
        offsets.
            ``(15) That the Inspector General of the Department of 
        Defense conducts periodic assessments of purchase card or 
        convenience check programs to identify and analyze risks of 
        illegal, improper, or erroneous purchases and payments and uses 
        such risk assessments to develop appropriate recommendations 
        for corrective actions.''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(d) Semiannual Report.--The Secretary of Defense and the 
Inspector General of the Department of Defense, shall submit to the 
Director of the Office of Management and Budget on a semiannual basis a 
joint report on illegal, improper, or erroneous purchases and payments 
made with purchase cards or convenience checks by employees of the 
Department of Defense. At a minimum, the report shall include the 
following:
            ``(1) A description of each violation.
            ``(2) A description of any adverse personnel action, 
        punishment, or other action taken against the employee for such 
        violation.
            ``(3) A description of actions taken by the Department of 
        Defense to address recommendations made to address findings 
        arising out of risk assessments and audits conducted pursuant 
        to this section.''.

SEC. 3. MANAGEMENT OF TRAVEL CARDS.

    Section 2 of the Travel and Transportation Reform Act of 1998 
(Public Law 105-264; 5 U.S.C. 5701 note) is amended by adding at the 
end the following new subsection:
    ``(h) Management of Travel Charge Cards.--
            ``(1) Required safeguards and internal controls.--The head 
        of each executive agency that has employees that use travel 
        charge cards shall establish and maintain the following 
        internal control activities to ensure the proper, efficient, 
        and effective use of such travel charge cards:
                    ``(A) There is a record in each executive agency of 
                each holder of a travel charge card issued on behalf of 
                the agency for official use, annotated with the 
                limitations on amounts that are applicable to the use 
                of each such card by that travel charge cardholder.
                    ``(B) Rebates and refunds based on prompt payment, 
                sales volume, or other actions by the agency on travel 
                charge card accounts are monitored for accuracy and 
                properly recorded as a receipt of the agency that 
                employs the cardholder.
                    ``(C) Periodic reviews are performed to determine 
                whether each travel charge cardholder has a need for 
                the travel charge card.
                    ``(D) Appropriate training is provided to each 
                travel charge cardholder and each official with 
                responsibility for overseeing the use of travel charge 
                cards issued by <DELETED>an</DELETED> the executive 
                agency.
                    ``(E) Each executive agency has specific policies 
                regarding the number of travel charge cards issued for 
                various component organizations and categories of 
                component organizations, the credit limits authorized 
                for various categories of cardholders, and categories 
                of employees eligible to be issued travel charge cards, 
                and designs those policies to minimize the financial 
                risk to the Federal Government of the issuance of the 
                travel charge cards and to ensure the integrity of 
                travel charge cardholders.
                    ``(F) Each executive agency ensures its contractual 
                arrangement with each servicing travel charge card 
                issuing contractor contains a requirement to evaluate 
                the creditworthiness of an individual before issuing 
                that individual a travel charge card, and that no 
                individual be issued a travel charge card if that 
                individual is found not creditworthy as a result of the 
                evaluation (except that this paragraph shall not 
                preclude issuance of a restricted use travel charge 
                card or pre-paid card when the individual lacks a 
                credit history or has a credit score below the minimum 
                credit score established by the Office of Management 
                and Budget). The Director of the Office of Management 
                and Budget shall establish a minimum credit score for 
                determining the creditworthiness of an individual based 
                on rigorous statistical analysis of the population of 
                cardholders and historical behaviors. Notwithstanding 
                any other provision of law, such evaluation shall 
                include an assessment of an individual's consumer 
                report from a consumer reporting agency as those terms 
                are defined in section 603 of the Fair Credit Reporting 
                Act (15 U.S.C. 1681a).
                    ``(G) Each executive agency utilizes effective 
                systems, techniques, and technologies to prevent or 
                identify improper purchases.
                    ``(H) Each executive agency ensures that the travel 
                charge card of each employee who ceases to be employed 
                by the agency is invalidated immediately upon 
                termination of the employment of the employee.
                    ``(I) Each executive agency utilizes, where 
                appropriate, direct payment to the holder of the travel 
                card contract.
            ``(2) Guidance on management of travel charge cards.--Not 
        later than 180 days after the date of the enactment of the 
        Government Charge Card Abuse Prevention Act of 2011, the 
        Director of the Office of Management and Budget shall review 
        the existing guidance and, as necessary, prescribe additional 
        guidance for executive agencies governing the implementation of 
        the requirements in paragraph (1).
            ``(3) Penalties for violations.--
                    ``(A) In general.--Consistent with the guidance 
                prescribed under paragraph (2), each executive agency 
                shall provide for appropriate adverse personnel actions 
                to be imposed in cases in which employees of the 
                executive agency fail to comply with applicable travel 
                charge card terms and conditions or applicable agency 
                regulations or commit fraud with respect to a travel 
                charge card, including removal in appropriate cases.
                    ``(B) Reports on violations.--The guidance 
                prescribed under paragraph (2) shall require each head 
                of an executive agency with more than $10,000,000 in 
                travel card spending annually, and each inspector 
                general of such an executive agency, on a semiannual 
                basis, to submit to the Director of the Office of 
                Management and Budget a joint report on violations or 
                other actions covered by subparagraph (A) by employees 
                of such executive agency. At a minimum, the report 
                shall set forth the following:
                            ``(i) A description of each violation.
                            ``(ii) A description of any adverse 
                        personnel action, punishment, or other action 
                        taken against the employee for such violation 
                        or other action.
            ``(4) Risk assessments and audits.--The inspector general 
        of each executive agency shall--
                    ``(A) conduct periodic assessments of the agency 
                travel charge card program and associated internal 
                controls to identify and analyze risks of illegal, 
                improper, or erroneous travel charges and payments in 
                order to develop a plan for using such risk assessments 
                to determine the scope, frequency, and number of 
                periodic audits of travel charge card transactions;
                    ``(B) perform periodic analysis and audits, as 
                appropriate, of travel charge card transactions 
                designed to identify potentially improper, erroneous, 
                and illegal uses of travel charge cards;
                    ``(C) report to the head of the executive agency 
                concerned on the results of such analysis and audits; 
                and
                    ``(D) report to the Director of the Office of 
                Management and Budget on the implementation of 
                recommendations made to the head of the executive 
                agency to address findings of any analysis or audit of 
                travel charge card transactions or programs for 
                compilation and transmission by the Director to 
                Congress and the Comptroller General.
            ``(5) Definitions.--In this subsection:
                    ``(A) The term `executive agency' means an agency 
                as that term is defined in subparagraphs (A) and (B) of 
                section 5701(1) of title 5, United States Code.
                    ``(B) The term `travel charge card' means any 
                Federal contractor-issued travel charge card that is 
                individually billed to each cardholder.''.

SEC. 4. MANAGEMENT OF CENTRALLY BILLED ACCOUNTS.

    (a) Required Internal Controls for Centrally Billed Accounts.--The 
head of an executive agency that has employees who use a travel charge 
card that is billed directly to the United States Government shall 
establish and maintain the following internal control activities:
            (1) Items submitted on an employee's travel voucher shall 
        be compared with items paid for using a centrally billed 
        account on any related travel to ensure that an employee is not 
        reimbursed for an item already paid for by the United States 
        Government through a centrally billed account.
            (2) The executive agency shall dispute unallowable and 
        erroneous charges and track the status of the disputed 
        transactions to ensure appropriate resolution.
            (3) The executive agency shall submit requests to servicing 
        airlines for refunds of fully or partially unused tickets, when 
        entitled to such refunds, and track the status of unused 
        tickets to ensure appropriate resolution.
    (b) Guidance.--Not later than 180 days after the date of the 
enactment of this Act, the Director of the Office of Management and 
Budget shall review the existing guidance and, as necessary, prescribe 
additional guidance for executive agencies implementing the 
requirements of subsection (a).

SEC. 5. CONSTRUCTION.

    Nothing in this Act shall be construed to excuse the head of an 
executive agency from the responsibilities set out in section 3512 of 
title 31, United States Code, or in the Improper Payments Information 
Act of 2002 (31 U.S.C. 3321 note).
                                                       Calendar No. 104

112th CONGRESS

  1st Session

                                 S. 300

                          [Report No. 112-37]

_______________________________________________________________________

                                 A BILL

              To prevent abuse of Government charge cards.

_______________________________________________________________________

                             July 18, 2011

                        Reported with amendments
```