Ebook Audit of NSF’s Travel Card Program
The Travel and Transportation Reform Act of 19981 (the Act) requires Federal employees to use travel charge cards for all payments of expenses related to official Government travel, including hotels, transportation costs, and meals. By consolidating travel expenditures with a single credit card vendor and by streamlining the process for advancing travel funds to federal employees, agencies reduce administrative costs associated with processing federal travel.
The General Services Administration (GSA) issues the Federal Travel Regulation (FTR) that implements the requirements of the Act, and administers government travel cards through its SmartPay program. Each agency selects one of the five banks contracted by GSA as their travel card provider and negotiates its own task order under the SmartPay master contract. The task order identifies the specific charge card services the selected bank will provide the agency, and documents the agreed upon fees, including additional negotiated rebate percentages.
The master contract allows each agency to receive rebates based on purchase dollar volume and payment performance. The minimum rebate percentage is .06 percent of total purchases, traveler’s checks, and automated teller machine (ATM) transactions made with the government travel cards. Uncollected account balances reduce the purchase dollar volume, thus reducing the amount of the agency’s rebate. The bank also pays a portion of the agency’s rebate to GSA as a service fee. Although generally minimal when compared to an agency’s total official travel expenditures, rebates nevertheless help to reduce agencies’ travel costs.
Upon selection, the bank vendor issues individual travel charge cards to agency employees and enters into a credit card agreement directly with the employee. Under the agreement, the employee is responsible for seeking reimbursement for the travel costs from the agency and paying the credit card bill to the bank. Federal standards of conduct require federal employees to pay their debts in a timely manner and federal travel regulations specifically prohibit the use of an individual’s travel card for any purpose other than official travel. Once the employee uses the travel card, the employee must pay his own balance, in full and on time, presumably from monies the agency has paid to the individual as a result of his request for reimbursement. However, because the employee is the responsible party on the individual account, the agency is under no obligation to pay the bill; the employee must pay the travel card bill, even if he has not yet received reimbursement from the agency. Agency Program Coordinators (APCs) are responsible for monitoring the travel card accounts to verify these accounts are paid in a timely manner.
Delinquency and nonpayment of an individual’s account are serious matters for both the individual and the agency. Delinquent accounts that are not the subject of a billing dispute may harm the individual’s credit rating and the bank may suspend or even cancel the individual’s travel card if the outstanding account balance becomes overdue. Furthermore, such a suspension or cancellation may affect the employee’s ability to travel on official business, and thus may impair the individual’s ability to perform his official duties.
While responsibility for payment rests with the individual, agencies also have a responsibility, as well as a financial incentive, to ensure that accounts are paid timely and in full. GSA’s master contract describes the agencies’ travel card program responsibilities. These include ensuring that cardholders use the card only for authorized purposes by monitoring account activity; and managing delinquencies and misuse by notifying the employee and management of delinquent accounts, taking appropriate disciplinary action, and, as a last resort, collecting the overdue amount from the employee through salary offsets. Additionally, the negotiated rebate provides a financial incentive for the agency to act to ensure that its employees’ overdue balances are paid in full. Because unpaid account balances reduce the amount of the rebate the agency receives, it is important that the agency minimize delinquent accounts. Monitoring and managing delinquencies also helps the agency avoid potential negative publicity that comes with unpaid accounts.
Under GSA’s SmartPay Program, the National Science Foundation (NSF) has contracted with Bank of America (BoA) for its travel card services. Approximately 1,000 NSF employees have a travel card and incur approximately $2.5 million in charges a year. NSF earned a rebate in FY 2004 amounting to approximately $12,590.
Contents
Introduction
Objectives, Scope, and Methodology
Results of Audit
Appendix A: Agency Response
Appendix B: Categories of Questionable Travel Card
Transactions
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