II 

110TH CONGRESS 

1ST SESSION S. 789 

To prevent abuse of Government credit cards. 

IN THE SENATE OF THE UNITED STATES 

MARCH 7, 2007 

Mr. GRASSLEY (for himself, Mr. LIEBERMAN, Ms. COLLINS, and Mr. COLEMAN) 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 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 2007’’. 

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 transaction and total credit amounts 

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

6 that purchase cardholder. 

7 (2) Each purchase cardholder is assigned an 

8 approving official other than the cardholder with the 

9 authority to approve or disapprove expenditures. 

10 (3) The holder of a purchase card and each of11 ficial with authority to authorize expenditures 

12 charged to the purchase card are responsible for— 

13 (A) reconciling the charges appearing on 

14 each statement of account for that purchase 

15 card with receipts and other supporting docu16 mentation; and 

17 (B) forwarding such reconciliation to the 

18 designated official who certifies the bill for pay19 ment in a timely manner. 

20 (4) Any disputed purchase card charge, and 

21 any discrepancy between a receipt and other sup22 porting documentation and the purchase card state23 ment of account, is resolved in the manner pre24 scribed in the applicable Governmentwide purchase 


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1 card contract entered into by the Administrator of 

2 General Services. 

3 (5) Payments on purchase card accounts are 

4 made promptly within prescribed deadlines to avoid 

5 interest penalties. 

6 (6) Rebates and refunds based on prompt pay7 ment on purchase card accounts are monitored for 

8 accuracy and properly recorded as a receipt to the 

9 agency that pays the monthly bill. 

10 (7) Records of each purchase card transaction 

11 (including records on associated contracts, reports, 

12 accounts, and invoices) are retained in accordance 

13 with standard Government policies on the disposition 

14 of records. 

15 (8) Periodic reviews are performed to determine 

16 whether each purchase cardholder has a need for the 

17 purchase card. 

18 (9) Appropriate training is provided to each 

19 purchase cardholder and each official with responsi20 bility for overseeing the use of purchase cards issued 

21 by an executive agency. 

22 (10) The executive agency has specific policies 

23 regarding the number of purchase cards issued by 

24 various organizations and categories of organiza25 tions, the credit limits authorized for various catVerDate Aug 31 2005 18:21 Mar 10, 2007 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S789.IS S789

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1 egories of cardholders, and categories of employees 

2 eligible to be issued purchase cards, and that those 

3 policies are designed to minimize the financial risk 

4 to the Federal Government of the issuance of the 

5 purchase cards and to ensure the integrity of pur6 chase cardholders. 

7 (11) The executive agency utilizes technologies 

8 to prevent or identify fraudulent purchases, includ9 ing controlling merchant codes and utilizing statis10 tical machine learning and pattern recognition tech11 nologies that review the risk of every transaction. 

12 (12) The executive agency invalidates the pur13 chase card of each employee who— 

14 (A) ceases to be employed by the agency 

15 immediately upon termination of the employ16 ment of the employee; or 

17 (B) transfers to another unit of the agency 

18 immediately upon the transfer of the employee. 

19 (13) The executive agency takes steps to re20 cover the cost of any improper or fraudulent pur21 chase made by an employee, including, as necessary, 

22 through salary offsets. 

23 (b) MANAGEMENT OF PURCHASE CARDS.—The head 

24 of each executive agency shall prescribe regulations imple25 menting the safeguards and internal controls in subsection 


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1 (a). The regulations shall be consistent with regulations 

2 that apply Governmentwide regarding the use of purchase 

3 cards by Government personnel for official purposes. 

4 (c) PENALTIES FOR VIOLATIONS.—The regulations 

5 prescribed under subsection (b) shall provide for appro6 priate adverse personnel actions or other punishment to 

7 be imposed in cases in which employees of an executive 

8 agency violate such regulations or are negligent or engage 

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

10 including imposition of the following penalties: 

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

12 by the executive agency to have engaged in fraud, 

13 referral of the case to the United States Attorney 

14 with jurisdiction over the matter. 

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

16 guilty of fraud or found by the executive agency to 

17 have egregiously abused a purchase card, dismissal 

18 of the employee. 

19 (d) RISK ASSESSMENTS AND AUDITS.—The Inspec20 tor General of each executive agency shall— 

21 (1) periodically conduct risk assessments of the 

22 agency purchase card program and associated inter23 nal controls and analyze identified weaknesses and 

24 the frequency of improper activity in order to de25 velop a plan for using such risk assessments to deVerDate Aug 31 2005 18:21 Mar 10, 2007 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S789.IS S789

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1 termine the scope, frequency, and number of peri2 odic audits of purchase cardholders; 

3 (2) perform periodic audits of purchase card4 holders designed to identify— 

5 (A) potentially fraudulent, improper, and 

6 abusive uses of purchase cards; 

7 (B) any patterns of improper cardholder 

8 transactions, such as purchases of prohibited 

9 items; and 

10 (C) categories of purchases that should be 

11 made by means other than purchase cards in 

12 order to better aggregate purchases and obtain 

13 lower prices; 

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

15 concerned on the results of such audits; and 

16 (4) report to the Director of the Office of Man17 agement and Budget and the Comptroller General 

18 on the implementation of recommendations made to 

19 the head of the executive agency to address findings 

20 during audits of purchase cardholders. 

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

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

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

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


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1 (f) RELATIONSHIP TO DEPARTMENT OF DEFENSE

2 PURCHASE CARD REGULATIONS.— 

3 (1) IN GENERAL.—Except as provided by the 

4 amendments made by paragraph (2), the require5 ments under this section shall not apply to the De6 partment of Defense. 

7 (2) EXCEPTION.—Section 2784(b) of title 10, 

8 United States Code, is amended— 

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

10 audits’’ and all that follows through the period 

11 at the end and inserting ‘‘risk assessments of 

12 the agency purchase card program and associ13 ated internal controls and analyze identified 

14 weaknesses and the frequency of improper ac15 tivity in order to develop a plan for using such 

16 risk assessments to determine the scope, fre17 quency, and number of periodic audits of pur18 chase cardholders.’’; and 

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

20 paragraphs: 

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

22 technologies to prevent or identify fraudulent pur23 chases, including controlling merchant codes and uti24 lizing statistical machine learning and pattern recVerDate Aug 31 2005 18:21 Mar 10, 2007 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S789.IS S789

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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) There is a record in each executive 

25 agency of each holder of a travel charge card 


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1 issued by the agency for official use, annotated 

2 with the limitations on amounts that are appli3 cable to the use of each such card by that travel 

4 charge cardholder. 

5 ‘‘(B) 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) Periodic reviews are performed to de10 termine whether each travel charge cardholder 

11 has a need for the travel charge card. 

12 ‘‘(D) Appropriate training is provided to 

13 each travel charge cardholder and each official 

14 with responsibility for overseeing the use of 

15 travel charge cards issued by an executive agen16 cy. 

17 ‘‘(E) Each executive agency has specific 

18 policies regarding the number of travel charge 

19 cards issued by various organizations and cat20 egories of organizations, the credit limits au21 thorized 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 18:21 Mar 10, 2007 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S789.IS S789

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1 el charge cards and to ensure the integrity of 

2 travel charge cardholders. 

3 ‘‘(F) The head of each executive agency 

4 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 18:21 Mar 10, 2007 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S789.IS S789

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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) Each executive agency utilizes tech8 nologies to prevent or identify fraudulent pur9 chases, 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) Each executive agency ensures that 

14 the travel charge card of each employee who 

15 ceases to be employed by the agency is invali16 dated immediately upon termination of the em17 ployment of the employee. 

18 ‘‘(I) Each executive agency utilizes manda19 tory split disbursements for travel card pur20 chases. 

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. 


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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) ASSESSMENTS.—The Inspector General of 

10 each executive agency shall— 

11 ‘‘(A) periodically conduct risk assessments 

12 of the agency travel card program and associ13 ated internal controls and analyze identified 

14 weaknesses and the frequency of improper ac15 tivity in order to develop a plan for using such 

16 risk assessments to determine the scope, fre17 quency, and number of periodic audits of pur18 chase cardholders; 

19 ‘‘(B) perform periodic audits of travel 

20 cardholders designed to identify potentially 

21 fraudulent, improper, and abusive uses of travel 

22 cards; 

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

24 agency concerned on the results of such audits; 

25 and 


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

2 Management and Budget and the Comptroller 

3 General on the implementation of recommenda4 tions made to the head of the executive agency 

5 to address findings during audits of travel card6 holders. 

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

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

9 agency as that term is defined in section 5701 

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

11 in the executive branch. 

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

13 the Federal contractor-issued travel charge card 

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

15 SEC. 4. MANAGEMENT OF CENTRALLY BILLED ACCOUNTS. 

16 The head of an executive agency that has employees 

17 who use a centrally billed account shall establish and 

18 maintain safeguards and internal controls to ensure the 

19 following: 

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

21 voucher are compared with items paid for using a 

22 centrally billed account to ensure that an employee 

23 is not reimbursed for an item already paid for 

24 through a centrally billed account. 


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1 (2) The executive agency submits requests for 

2 refunds for unauthorized purchases to the holder of 

3 the applicable contract for a centrally billed account. 

4 (3) The executive agency submits requests for 

5 refunds for fully or partially unused tickets to the 

6 holder of the applicable contract for a centrally 

7 billed account. 

8 SEC. 5. REGULATIONS. 

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

10 date of the enactment of this Act— 

11 (1) the head of each executive agency shall pro12 mulgate regulations to implement the requirements 

13 of sections 2 and 4; and 

14 (2) the Administrator of General Services shall 

15 promulgate regulations required pursuant to the 

16 amendments made by section 3. 

17 (b) BEST PRACTICES.—Regulations promulgated 

18 under this section shall reflect best practices for con19 ducting purchase card and travel card programs. 

Æ 


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