GAO to Agencies: Charge!

While the rest of us are cautioned to curb our credit card use, congressional auditors want federal agencies to whip out the plastic more often.

Government purchase cards can save money and help cut staff, according to a recent report of the General Accounting Office. Use of commercial purchase cards rocketed up 1,500 percent between 1990 and 1995--from 271,000 purchases worth $64 million to 4 million purchases worth more than $1.6 billion--but there's lots of room to grow, says GAO.

Purchase cards made their debut in a 1986 pilot project, but didn't really take off until the National Performance Review declared that using the cards for just half of government's small purchases could save $180 million a year. The 1994 Federal Acquisition Streamlining Act made the cards the preferred method for purchases worth $2,500 or less. By helping program staffers buy goods more easily and quickly, the cards have helped agencies absorb procurement staff cuts. The Interior Department said the cards helped it handle a 12 percent reduction in procurement staffing since fiscal 1993.

Auditors can't peg exactly how much agencies saved using the cards, but estimates range from $1.42 to $142 per transaction, for an average of $54. The Postal Service, second-largest user of the cards, estimated saving an average of $22 on its nearly 700,000 transactions in 1995.

GAO says agencies are confused about exactly how to use the purchase cards. An interagency task force soon will propose a clearer, simpler section in the Federal Acquisition Regulation on using the cards. GAO also suggested the National Performance Review create a special place for agencies to share credit card lessons learned on the Acquisition Reform Net Web site.