II 

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. 

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’’. 


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1 SEC. 2. MANAGEMENT OF PURCHASE CARDS. 

2 (a) REQUIRED SAFEGUARDS AND INTERNAL CON3 TROLS.—The head of each executive agency that issues 

4 and uses purchase cards and convenience checks shall es5 tablish and maintain safeguards and internal controls to 

6 ensure the following: 

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

8 of each holder of a purchase card issued by the 

9 agency for official use, annotated with the limita10 tions on single transactions and total transactions 

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

12 check by that purchase cardholder. 

13 (2) Each purchase cardholder and individual 

14 issued a convenience check is assigned an approving 

15 official other than the cardholder with the authority 

16 to approve or disapprove transactions. 

17 (3) The holder of a purchase card and each of18 ficial with authority to authorize expenditures 

19 charged to the purchase card are responsible for— 

20 (A) reconciling the charges appearing on 

21 each statement of account for that purchase 

22 card with receipts and other supporting docu23 mentation; and 

24 (B) forwarding such reconciliation to the 

25 certifying official in a timely manner to enable 

26 the certifying official to ensure that the Federal 


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1 Government ultimately pays only for valid 

2 charges. 

3 (4) Any disputed purchase card charge, and 

4 any discrepancy between a receipt and other sup5 porting documentation and the purchase card state6 ment of account, is resolved in the manner pre7 scribed in the applicable governmentwide purchase 

8 card contract entered into by the Administrator of 

9 General Services and in accordance with all laws and 

10 executive agency regulations. 

11 (5) Payments on purchase card accounts are 

12 made promptly within prescribed deadlines to avoid 

13 interest penalties. 

14 (6) Rebates and refunds based on prompt pay15 ment, sales volume, or other actions by the agency 

16 on purchase card accounts are reviewed for accuracy 

17 and properly recorded as a receipt to the agency 

18 that pays the monthly bill. 

19 (7) Records of each purchase card transaction 

20 (including records on associated contracts, reports, 

21 accounts, and invoices) are retained in accordance 

22 with standard Government policies on the disposition 

23 of records. 


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1 (8) Periodic reviews are performed to determine 

2 whether each purchase cardholder has a need for the 

3 purchase card. 

4 (9) Appropriate training regarding the proper 

5 use of purchase cards is provided to each purchase 

6 cardholder in advance of being issued a purchase 

7 card and periodically thereafter and to each official 

8 with responsibility for overseeing the use of purchase 

9 cards issued by an executive agency in advance of 

10 assuming such oversight duties and periodically 

11 thereafter. 

12 (10) The executive agency has specific policies 

13 regarding the number of purchase cards issued by 

14 various component organizations and categories of 

15 component organizations, the credit limits author16 ized for various categories of cardholders, and cat17 egories of employees eligible to be issued purchase 

18 cards, and that those policies are designed to mini19 mize the financial risk to the Federal Government of 

20 the issuance of the purchase cards and to ensure the 

21 integrity of purchase cardholders. 

22 (11) The executive agency utilizes effective sys23 tems, techniques, and technologies to prevent or 

24 identify fraudulent purchases. 


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1 (12) The executive agency invalidates the pur2 chase card of each employee who— 

3 (A) ceases to be employed by the agency, 

4 immediately upon termination of the employ5 ment of the employee; or 

6 (B) transfers to another unit of the agency 

7 immediately upon the transfer of the employee 

8 unless the agency determines that the units are 

9 covered by the same purchase card authority. 

10 (13) The executive agency takes steps to re11 cover the cost of any erroneous, improper, or illegal 

12 purchase made with a purchase card or convenience 

13 check by an employee, including, as necessary, 

14 through salary offsets. 

15 (b) GUIDANCE ON MANAGEMENT OF PURCHASE

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

17 enactment of this Act, the Director of the Office of Man18 agement and Budget shall review the existing guidance 

19 and, as necessary, prescribe additional guidance governing 

20 the implementation of the safeguards and internal controls 

21 required by subsection (a) by executive agencies. 

22 (c) PENALTIES FOR VIOLATIONS.— 

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

24 agency shall provide for appropriate adverse per25 sonnel actions or other punishment to be imposed in 


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1 cases in which employees of the agency violate agen2 cy policies implementing the guidance required by 

3 subsection (b) or make improper, erroneous, or ille4 gal purchases with purchase cards or convenience 

5 checks. 

6 (2) DISMISSAL.—Penalties prescribed for em7 ployee misuse of purchase cards or convenience 

8 checks shall include dismissal of the employee, as 

9 appropriate. 

10 (3) REPORTS ON VIOLATIONS.—The guidance 

11 prescribed under subsection (b) shall direct each 

12 head of an executive agency with more than 

13 $10,000,000 in purchase card spending annually, 

14 and each Inspector General of such an executive 

15 agency, on a semiannual basis, to submit to the Di16 rector of the Office of Management and Budget a 

17 joint report on violations or other actions covered by 

18 paragraph (1) by employees of such executive agen19 cy. At a minimum, the report shall set forth the fol20 lowing: 

21 (A) A description of each violation. 

22 (B) A description of any adverse personnel 

23 action, punishment, other action taken against 

24 the employee for such violation. 


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1 (d) RISK ASSESSMENTS AND AUDITS.—The Inspec2 tor General of each executive agency shall— 

3 (1) conduct periodic assessments of the agency 

4 purchase card or convenience check programs to 

5 identify and analyze risks of illegal, improper, or er6 roneous purchases and payments in order to develop 

7 a plan for using such risk assessments to determine 

8 the scope, frequency, and number of periodic audits 

9 of purchase card or convenience check transactions; 

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

11 purchase card transactions designed to identify— 

12 (A) potentially illegal, improper, erroneous, 

13 and abusive uses of purchase cards; 

14 (B) any patterns of such uses; and 

15 (C) categories of purchases that could be 

16 made by means other than purchase cards in 

17 order to better aggregate purchases and obtain 

18 lower prices (excluding transactions made under 

19 card-based strategic sourcing arrangements); 

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

21 concerned on the results of such analysis or audits; 

22 and 

23 (4) report to the Director of the Office of Man24 agement and Budget on the implementation of rec25 ommendations made to the head of the executive 


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1 agency to address findings of any analysis or audit 

2 of purchase card and convenience check transactions 

3 or programs for compilation and transmission by the 

4 Director to Congress and the Comptroller General. 

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

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

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

8 Procurement Policy Act (41 U.S.C. 403(1)) 133 of title 

9 41, United States Code, except as provided under sub10 section (f)(1). 

11 (f) RELATIONSHIP TO DEPARTMENT OF DEFENSE

12 PURCHASE CARD REGULATIONS.— 

13 (1) IN GENERAL.—The requirements of sub14 sections (a) through (d) shall not apply to the De15 partment of Defense. 

16 (2) CONFORMING AMENDMENTS.—Section 2784 

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

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

19 the following new paragraphs: 

20 ‘‘(11) That each purchase cardholder and indi21 vidual issued a convenience check is assigned an ap22 proving official other than the cardholder with the 

23 authority to approve or disapprove transactions. 


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

2 effective systems, techniques, and technologies to 

3 prevent or identify fraudulent purchases. 

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

5 appropriate steps to invalidate the purchase card of 

6 each employee who— 

7 ‘‘(A) ceases to be employed by the Depart8 ment of Defense, immediately upon termination 

9 of the employment of the employee; or 

10 ‘‘(B) transfers to another unit of the De11 partment of Defense immediately upon the 

12 transfer of the employee unless the Secretary of 

13 Defense determines that the units are covered 

14 by the same purchase card authority. 

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

16 appropriate steps to recover the cost of any erro17 neous, improper, or illegal purchase made with a 

18 purchase card or convenience check by an employee, 

19 including, as necessary, through salary offsets. 

20 ‘‘(15) That the Inspector General of the De21 partment of Defense conducts periodic assessments 

22 of purchase card or convenience check programs to 

23 identify and analyze risks of illegal, improper, or er24 roneous purchases and payments and uses such risk 


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1 assessments to develop appropriate recommendations 

2 for corrective actions.’’; and 

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

4 subsection: 

5 ‘‘(d) SEMIANNUAL REPORT.—The Secretary of De6 fense and the Inspector General of the Department of De7 fense, shall submit to the Director of the Office of Man8 agement and Budget on a semiannual basis a joint report 

9 on illegal, improper, or erroneous purchases and payments 

10 made with purchase cards or convenience checks by em11 ployees of the Department of Defense. At a minimum, the 

12 report shall include the following: 

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

14 ‘‘(2) A description of any adverse personnel ac15 tion, punishment, or other action taken against the 

16 employee for such violation. 

17 ‘‘(3) A description of actions taken by the De18 partment of Defense to address recommendations 

19 made to address findings arising out of risk assess20 ments and audits conducted pursuant to this sec21 tion.’’. 

22 SEC. 3. MANAGEMENT OF TRAVEL CARDS. 

23 Section 2 of the Travel and Transportation Reform 

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


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1 is amended by adding at the end the following new sub2 section: 

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

4 ‘‘(1) REQUIRED SAFEGUARDS AND INTERNAL

5 CONTROLS.—The head of each executive agency that 

6 has employees that use travel charge cards shall es7 tablish and maintain the following internal control 

8 activities to ensure the proper, efficient, and effec9 tive use of such travel charge cards: 

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

11 agency of each holder of a travel charge card 

12 issued on behalf of the agency for official use, 

13 annotated with the limitations on amounts that 

14 are applicable to the use of each such card by 

15 that travel charge cardholder. 

16 ‘‘(B) Rebates and refunds based on 

17 prompt payment, sales volume, or other actions 

18 by the agency on travel charge card accounts 

19 are monitored for accuracy and properly re20 corded as a receipt of the agency that employs 

21 the cardholder. 

22 ‘‘(C) Periodic reviews are performed to de23 termine whether each travel charge cardholder 

24 has a need for the travel charge card. 


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1 ‘‘(D) Appropriate training is provided to 

2 each travel charge cardholder and each official 

3 with responsibility for overseeing the use of 

4 travel charge cards issued by an the executive 

5 agency. 

6 ‘‘(E) Each executive agency has specific 

7 policies regarding the number of travel charge 

8 cards issued for various component organiza9 tions and categories of component organiza10 tions, the credit limits authorized for various 

11 categories of cardholders, and categories of em12 ployees eligible to be issued travel charge cards, 

13 and designs those policies to minimize the fi14 nancial risk to the Federal Government of the 

15 issuance of the travel charge cards and to en16 sure the integrity of travel charge cardholders. 

17 ‘‘(F) Each executive agency ensures its 

18 contractual arrangement with each servicing 

19 travel charge card issuing contractor contains a 

20 requirement to evaluate the creditworthiness of 

21 an individual before issuing that individual a 

22 travel charge card, and that no individual be 

23 issued a travel charge card if that individual is 

24 found not creditworthy as a result of the eval25 uation (except that this paragraph shall not 


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1 preclude issuance of a restricted use travel 

2 charge card or pre-paid card when the indi3 vidual lacks a credit history or has a credit 

4 score below the minimum credit score estab5 lished by the Office of Management and Budg6 et). The Director of the Office of Management 

7 and Budget shall establish a minimum credit 

8 score for determining the creditworthiness of an 

9 individual based on rigorous statistical analysis 

10 of the population of cardholders and historical 

11 behaviors. Notwithstanding any other provision 

12 of law, such evaluation shall include an assess13 ment of an individual’s consumer report from a 

14 consumer reporting agency as those terms are 

15 defined in section 603 of the Fair Credit Re16 porting Act (15 U.S.C. 1681a). 

17 ‘‘(G) Each executive agency utilizes effec18 tive systems, techniques, and technologies to 

19 prevent or identify improper purchases. 

20 ‘‘(H) Each executive agency ensures that 

21 the travel charge card of each employee who 

22 ceases to be employed by the agency is invali23 dated immediately upon termination of the em24 ployment of the employee. 


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

2 appropriate, direct payment to the holder of the 

3 travel card contract. 

4 ‘‘(2) GUIDANCE ON MANAGEMENT OF TRAVEL

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

6 date of the enactment of the Government Charge 

7 Card Abuse Prevention Act of 2011, the Director of 

8 the Office of Management and Budget shall review 

9 the existing guidance and, as necessary, prescribe 

10 additional guidance for executive agencies governing 

11 the implementation of the requirements in para12 graph (1). 

13 ‘‘(3) PENALTIES FOR VIOLATIONS.— 

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

15 guidance prescribed under paragraph (2), each 

16 executive agency shall provide for appropriate 

17 adverse personnel actions to be imposed in 

18 cases in which employees of the executive agen19 cy fail to comply with applicable travel charge 

20 card terms and conditions or applicable agency 

21 regulations or commit fraud with respect to a 

22 travel charge card, including removal in appro23 priate cases. 

24 ‘‘(B) REPORTS ON VIOLATIONS.—The 

25 guidance prescribed under paragraph (2) shall 


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1 require each head of an executive agency with 

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

3 annually, and each inspector general of such an 

4 executive agency, on a semiannual basis, to sub5 mit to the Director of the Office of Manage6 ment and Budget a joint report on violations or 

7 other actions covered by subparagraph (A) by 

8 employees of such executive agency. At a min9 imum, the report shall set forth the following: 

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

11 ‘‘(ii) A description of any adverse per12 sonnel action, punishment, or other action 

13 taken against the employee for such viola14 tion or other action. 

15 ‘‘(4) RISK ASSESSMENTS AND AUDITS.—The in16 spector general of each executive agency shall— 

17 ‘‘(A) conduct periodic assessments of the 

18 agency travel charge card program and associ19 ated internal controls to identify and analyze 

20 risks of illegal, improper, or erroneous travel 

21 charges and payments in order to develop a 

22 plan for using such risk assessments to deter23 mine the scope, frequency, and number of peri24 odic audits of travel charge card transactions; 


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

2 as appropriate, of travel charge card trans3 actions designed to identify potentially im4 proper, erroneous, and illegal uses of travel 

5 charge cards; 

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

7 agency concerned on the results of such anal8 ysis and audits; and 

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

10 Management and Budget on the implementa11 tion of recommendations made to the head of 

12 the executive agency to address findings of any 

13 analysis or audit of travel charge card trans14 actions or programs for compilation and trans15 mission by the Director to Congress and the 

16 Comptroller General. 

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

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

19 agency as that term is defined in subpara20 graphs (A) and (B) of section 5701(1) of title 

21 5, United States Code. 

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

23 any Federal contractor-issued travel charge 

24 card that is individually billed to each card25 holder.’’. 


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1 SEC. 4. MANAGEMENT OF CENTRALLY BILLED ACCOUNTS. 

2 (a) REQUIRED INTERNAL CONTROLS FOR CEN3 TRALLY BILLED ACCOUNTS.—The head of an executive 

4 agency that has employees who use a travel charge card 

5 that is billed directly to the United States Government 

6 shall establish and maintain the following internal control 

7 activities: 

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

9 voucher shall be compared with items paid for using 

10 a centrally billed account on any related travel to en11 sure that an employee is not reimbursed for an item 

12 already paid for by the United States Government 

13 through a centrally billed account. 

14 (2) The executive agency shall dispute unallow15 able and erroneous charges and track the status of 

16 the disputed transactions to ensure appropriate reso17 lution. 

18 (3) The executive agency shall submit requests 

19 to servicing airlines for refunds of fully or partially 

20 unused tickets, when entitled to such refunds, and 

21 track the status of unused tickets to ensure appro22 priate resolution. 

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

24 date of the enactment of this Act, the Director of the Of25 fice of Management and Budget shall review the existing 

26 guidance and, as necessary, prescribe additional guidance 


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1 for executive agencies implementing the requirements of 

2 subsection (a). 

3 SEC. 5. CONSTRUCTION. 

4 Nothing in this Act shall be construed to excuse the 

5 head of an executive agency from the responsibilities set 

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

7 in the Improper Payments Information Act of 2002 (31 

8 U.S.C. 3321 note). 


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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 


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