GovernmentExecutive.com

Two senators introduced legislation Wednesday aimed at stemming wasteful spending by holders of government charge cards.

The bill, drafted by Sens. Susan Collins, R-Maine, and Russell Feingold, D-Wis., orders the Office of Management and Budget to ensure that agencies help purchase-card holders hone shopping skills. The legislation also would encourage the General Services Administration to secure bigger discounts for card purchases.

Purchase cards, which are designed to simplify the process of procuring supplies worth less than $2,500, have long been a magnet for fraud and misuse. Agencies have cited numerous instances where employees have used the cards to buy frivolous, non-work-related items, including designer briefcases, ski clothing, leather bomber jackets, Lego toy robots and a mounted deer head.

But Collins and Feingold introduced the 2004 Purchase Card Waste Elimination Act to address a separate problem: waste that occurs when government employees use charge cards with good intentions, but fail to get the best possible deals. Agencies have stepped up efforts to educate workers on proper use of cards. But they have done little to teach employees about available discounts or deals listed on the GSA schedule of pre-negotiated contracts, General Accounting Office auditors told the Senate Governmental Affairs Committee at a hearing Wednesday.

Charge-card holders and officials designated to approve purchases are often poorly trained, said Gregory Kutz, GAO's director of financial management and assurance. For example, at a Federal Aviation Administration field office, two-thirds of managers overseeing acquisitions and 38 percent of card holders went at least five years without any documented training.

Poor training leads to wasteful use of charge cards, Kutz said. At the Transportation Department, for instance, one purchase-card holder bought office supplies at prices 20 percent above those available on the GSA schedule, he testified. At the Agriculture Department, an employee used a purchase card to buy telecommunications services at 13 percent above the GSA price.

Under Collins and Feingold's bill, OMB officials would have to issue guidelines for agencies on analyzing purchase-card spending and negotiating discount agreements with companies. OMB would also need to help agencies facilitate better communication with card holders to ensure shoppers are aware of deals, and would need to provide Congress with annual progress reports.

In turn, agencies would need to submit to OMB periodic reports on efforts to promote smarter shopping. Agencies already compile quarterly reports on steps taken to monitor card use and prevent fraud.

The legislation also would require GSA to "actively pursue" point-of-sale discounts with large suppliers. GSA already does this to some extent, said Neal Fox, assistant commissioner of the agency's Office of Commercial Acquisition. Office Depot and Home Depot now offer walk-in discounts, thanks to those efforts, Fox testified. But Wal-Mart has rejected invitations to participate.

GSA also provides online training courses for card users, Fox told lawmakers. The SmartPay program teaches card holders about ethics. GSA is in the process of adding online lessons on efficient shopping techniques, including ways of comparing prices.

The Pentagon is looking to GSA to take the lead on negotiating charge-card deals, said Col. William Kelley, program director for the Defense Department's Data Mining Division. "I do not believe we want commercial vendors to have to negotiate point-of-sale discounts and other discount agreements on purchase cards from a multitude of federal agencies."

COMMENTS

• After spending 20 years in an agency that did control cards I was shocked to see what continues to happen at NOAA. It is no wonder the abuse continues year after year with no accountability if this is how it works at other agencies. GovExec.com reader Posted May 5, 2004 9:23 AM
• I read this article with extreme interest. I was once an "Administrative Management Specialist" for the National Oceanic and Atmospheric Administration. One of my duties was purchasing and controlling the use of the "Government Credit Cards" for an office, which had locations nationwide. If the records for the office I was responsible for were checked for the time period I was there, they would find that just about every purchase was attached to my name. No matter who used the credit card number, they would give my name as the responsible person. Many times I felt that the purchases made would have been better suited to the procurement route rather than the credit card route, however, I was not allowed to make that decision. The majority of purchases on the credit card were done without my knowledge and I would find out the card was used when something would arrive in the office or the bill would arrive. Senators Collins and Feingold have offered a bill which would require training before the credit card is issued to someone or used. They need to look at government regulations, this training is already required. They speak about stronger controls on the people who are using the card (or whose name is attached to the authority to use the card). These are not necessarily the people making the frivolous purchases. The training needs to be aimed at upper management staff in an office that allows anyone to call a vendor and make a purchase. The person in charge of purchasing for an office has already been trained. Most of them have spent weeks in COTR training, small purchasing school, and procurement classes (all of which are a requirement for the position of Admin. Management Spec.). I also believe that a requirement for the issuing of a government purchasing card should be a credit check. If a person has a problem with their personal credit which stems from a spending problem then what makes anyone think they will not abuse the government credit as well. The people in this country laugh as they hear jokes about shopaholics and shop-till-you-drop. Shoppers’ disease is a form of obsessive-compulsive disorder and is not a laughing matter. It is a true illness recognized in the DSM, under "other disorders", by the American Psychological Association, the American Sociological Association, the American Psychiatric Association, and the Mental Health Association. I firmly agree that there is a problem in the government with the use of the government credit cards. However, as usual, the Senate is addressing the wrong level of employees. The people who are balancing an office budget and trying to control purchasing, procurement, human resources, payroll, training, travel, and any other administrative task (including informal supervision of clerical staff) are already trained and already over worked. These people on average are at the GS-7 to GS-11 level and have to perform, though many times on a small scale, all these tasks by themselves without even the assistance of a clerk. Anonymous Posted May 2, 2004 2:16 PM