II 

108TH CONGRESS 

1ST SESSION S. 1744

To prevent abuse of Government credit cards. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 16, 2003

Mr. GRASSLEY (for himself and Mr. BYRD) introduced the following bill; 

which was read twice and referred to the Committee on 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 ‘‘Credit Card Abuse 

5 Prevention Act of 2003’’. 

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) That there is a record in each executive 

2 agency of each holder of a purchase card issued by 

3 the agency for official use, annotated with the limi4 tations on single transaction and total credit 

5 amounts that are applicable to the use of each such 

6 card by that purchase cardholder. 

7 (2) That the holder of a purchase card and 

8 each official with authority to authorize expenditures 

9 charged to the purchase card are responsible for rec10 onciling the charges appearing on each statement of 

11 account for that purchase card with receipts and 

12 other supporting documentation and forwarding 

13 such reconciliation to the designated official who cer14 tifies the bill for payment in a timely manner. 

15 (3) That any disputed purchase card charge, 

16 and any discrepancy between a receipt and other 

17 supporting documentation and the purchase card 

18 statement of account, is resolved in the manner pre19 scribed in the applicable Governmentwide purchase 

20 card contract entered into by the Administrator of 

21 General Services. 

22 (4) That payments on purchase card accounts 

23 are made promptly within prescribed deadlines to 

24 avoid interest penalties. 
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1 (5) That rebates and refunds based on prompt 

2 payment on purchase card accounts are monitored 

3 for accuracy and properly recorded as a receipt to 

4 the agency that pays the monthly bill. 

5 (6) That records of each purchase card trans6 action (including records on associated contracts, re7 ports, accounts, and invoices) are retained in accord8 ance with standard Government policies on the dis9 position of records. 

10 (7) That periodic reviews are performed to de11 termine whether each purchase cardholder has a 

12 need for the purchase card. 

13 (8) That appropriate training is provided to 

14 each purchase cardholder and each official with re15 sponsibility for overseeing the use of purchase cards 

16 issued by an executive agency. 

17 (9) That each executive agency has specific 

18 policies regarding the number of purchase cards 

19 issued by various organizations and categories of or20 ganizations, the credit limits authorized for various 

21 categories of cardholders, and categories of employ22 ees eligible to be issued purchase cards, and that 

23 those policies are designed to minimize the financial 

24 risk to the Federal Government of the issuance of 
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1 the purchase cards and to ensure the integrity of 

2 purchase cardholders. 

3 (10) That the head of each executive agency 

4 evaluate the creditworthiness of an individual before 

5 issuing the individual a purchase card, and that no 

6 individual be issued a purchase card if the individual 

7 is found not creditworthy as a result of the evalua8 tion. Notwithstanding any other provision of law, 

9 such evaluation shall include an assessment of an in10 dividual’s consumer report from a consumer report11 ing agency as those terms are defined in section 603 

12 of the Fair Credit Reporting Act. The obtaining of 

13 a consumer report under this subsection is deemed 

14 to be a circumstance or purpose authorized or listed 

15 under section 604 of the Fair Credit Reporting Act. 

16 (11) That each executive agency invalidate the 

17 purchase card of each employee who—

18 (A) ceases to be employed by the agency 

19 immediately upon termination of the employ20 ment of the employee; or 

21 (B) transfers to another unit of the agency 

22 immediately upon the transfer of the employee. 

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). Those 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 (a) 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 removal in appropriate cases. 

11 (d) The Inspector General of each executive agency 

12 shall—

13 (1) periodically conduct risk assessments of the 

14 agency purchase card program and associated inter15 nal controls and analyze identified weaknesses and 

16 the frequency of improper activity in order to de17 velop a plan for using such risk assessments to de18 termine the scope, frequency, and number of peri19 odic audits of purchase cardholders; 

20 (2) perform periodic audits of purchase card21 holders designed to identify—

22 (A) potentially fraudulent, improper, and 

23 abusive uses of purchase cards; 
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1 (B) any patterns of improper cardholder 

2 transactions, such as purchases of prohibited 

3 items; and 

4 (C) categories of purchases that should be 

5 made by means other than purchase cards in 

6 order to better aggregate purchases and obtain 

7 lower prices; 

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

9 concerned on the results of such audits; and 

10 (4) report to the Director of the Office of Man11 agement and Budget and the Comptroller General 

12 on the implementation of recommendations made to 

13 the head of the executive agency to address findings 

14 during audits of purchase cardholders. 

15 (e) DEFINITION OF EXECUTIVE AGENCY.—For the 

16 purpose of this section the term ‘‘executive agency’’ has 

17 the meaning provided in section 4(1) of the Office of Fed18 eral Procurement Policy Act (41 U.S.C. 403(1)). 

19 (f) RELATIONSHIP TO DEPARTMENT OF DEFENSE

20 PURCHASE CARD REGULATIONS.—

21 (1) The requirements under this section shall 

22 not apply to the Department of Defense. 

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

24 Code, is amended—
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1 (A) in paragraph (8), by striking ‘‘periodic 

2 audits’’ and inserting ‘‘risk assessments of the 

3 agency purchase card program and associated 

4 internal controls and analyze identified weak5 nesses and the frequency of improper activity in 

6 order to develop a plan for using such risk as7 sessments to determine the scope, frequency, 

8 and number of periodic audits of purchase card9 holders.’’; and 

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

11 paragraphs: 

12 ‘‘(11) That the Secretary of Defense shall 

13 evaluate the creditworthiness of an individual before 

14 issuing the individual a purchase card, and that no 

15 individual be issued a purchase card if the individual 

16 is not found creditworthy as a result of the evalua17 tion. Notwithstanding any other provision of law, 

18 such evaluation shall include an assessment of an in19 dividual’s consumer report from a consumer report20 ing agency as those terms are defined in section 603 

21 of the Fair Credit Reporting Act. The obtaining of 

22 a consumer report under this subsection is deemed 

23 to be a circumstance or purpose authorized or listed 

24 under section 604 of the Fair Credit Reporting Act. 
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1 ‘‘(12) That the Secretary of Defense invalidate 

2 the purchase card of each employee who ceases to be 

3 employed by the department immediately upon ter4 mination of the employment of the employee or 

5 transfers to another agency or subunit within the 

6 department immediately upon transfer.’’. 

7 SEC. 3. MANAGEMENT OF TRAVEL CARDS. 

8 Section 2 of the Travel and Transportation Reform 

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

10 is amended by adding at the end the following new sub11 section: 

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

13 ‘‘(1) REQUIRED SAFEGUARDS AND INTERNAL

14 CONTROLS.—The head of each executive agency that 

15 has employees that use travel charge cards shall es16 tablish and maintain safeguards and internal con17 trols over travel charge cards to ensure the fol18 lowing: 

19 ‘‘(A) That there is a record in each execu20 tive agency of each holder of a travel charge 

21 card issued by the agency for official use, anno22 tated with the limitations on amounts that are 

23 applicable to the use of each such card by that 

24 travel charge cardholder.
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1 ‘‘(B) That rebates and refunds based on 

2 prompt payment on travel charge card accounts 

3 are properly recorded as a receipt of the agency 

4 that employs the cardholder. 

5 ‘‘(C) That periodic reviews are performed 

6 to determine whether each travel charge card7 holder has a need for the travel charge card. 

8 ‘‘(D) That appropriate training is provided 

9 to each travel charge cardholder and each offi10 cial with responsibility for overseeing the use of 

11 travel charge cards issued by an executive agen12 cy. 

13 ‘‘(E) That each executive agency has spe14 cific policies regarding the number of travel 

15 charge cards issued by various organizations 

16 and categories of organizations, the credit limits 

17 authorized for various categories of cardholders, 

18 and categories of employees eligible to be issued 

19 travel charge cards, and that those policies are 

20 designed to minimize the financial risk to the 

21 Federal Government of the issuance of the trav22 el charge cards and to ensure the integrity of 

23 travel charge cardholders. 

24 ‘‘(F) That the head of each executive agen25 cy evaluates the creditworthiness of an indi-
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1 vidual before issuing the individual a travel 

2 charge card, and that no individual be issued a 

3 travel charge card if the individual is found not 

4 creditworthy as a result of the evaluation (ex5 cept that this paragraph shall not preclude 

6 issuance of a restricted use travel charge card 

7 when the individual lacks a credit history). Not8 withstanding any other provision of law, such 

9 evaluation shall include an assessment of an in10 dividual’s consumer report from a consumer re11 porting agency as those terms are defined in 

12 section 603 of the Fair Credit Reporting Act. 

13 The obtaining of a consumer report under this 

14 subsection is deemed to be a circumstance or 

15 purpose authorized or listed under section 604 

16 of the Fair Credit Reporting Act. 

17 ‘‘(G) That each executive agency ensures 

18 that the travel charge card of each employee 

19 who ceases to be employed by the agency is in20 validated immediately upon termination of the 

21 employment of the employee. 

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

23 General Services shall prescribe regulations gov24 erning the implementation of the safeguards and in-
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1 ternal controls in paragraph (1) by executive agen2 cies. 

3 ‘‘(3) PENALTIES FOR VIOLATIONS.—The regu4 lations prescribed under paragraph (2) shall provide 

5 for appropriate adverse personnel actions or other 

6 punishment to be imposed in cases in which employ7 ees of an executive agency violate such regulations 

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

9 with respect to a travel charge card, including re10 moval in appropriate cases. 

11 ‘‘(4) The Inspector General of each executive 

12 agency shall—

13 ‘‘(A) periodically conduct risk assessments 

14 of the agency travel card program and associ15 ated internal controls and analyze identified 

16 weaknesses and the frequency of improper ac17 tivity in order to develop a plan for using such 

18 risk assessments to determine the scope, fre19 quency, and number of periodic audits of pur20 chase cardholders; 

21 ‘‘(B) perform periodic audits of travel 

22 cardholders designed to identify potentially 

23 fraudulent, improper, and abusive uses of travel 

24 cards; 
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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.—For purposes of this sub11 section: 

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

13 agency as that term is defined in section 5701 

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

15 in the executive branch. 

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

17 the Federal contractor-issued travel charge card 

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

19 SEC. 4. REGULATIONS. 

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

21 date of the enactment of this Act—

22 (1) the head of each executive agency shall pro23 mulgate regulations to implement the requirements 

24 of section 2; and 
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1 (2) the Administrator of General Services shall 

2 promulgate regulations required pursuant to the 

3 amendments made by section 3. 

4 (b) BEST PRACTICES.—Regulations promulgated 

5 under this section shall reflect best practices for con6 ducting purchase card and travel card programs.

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