GOVERNMENT CHARGE CARD ABUSE PREVENTION ACT OF 2012
(House of Representatives - July 31, 2012)

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[Pages H5411-H5414]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          GOVERNMENT CHARGE CARD ABUSE PREVENTION ACT OF 2012

  Mr CHAFFETZ. Mr. Speaker, I move to suspend the rules and pass the 
bill (S. 300) to prevent abuse of Government charge cards, as amended.
  The Clerk read the title of the bill.
  The text of the amendment is as follows:
  Amendment:
  Strike out all after the enacting clause and insert:

                                 S. 300

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Government Charge Card Abuse 
     Prevention Act of 2012''.

     SEC. 2. MANAGEMENT OF PURCHASE CARDS.

       (a) Government-wide Safeguards and Internal Controls.--
       (1) In general.--Chapter 19 of title 41, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 1909. Management of purchase cards

       ``(a) Required Safeguards and Internal Controls.--The head 
     of each executive agency that issues and uses purchase cards 
     and convenience checks shall establish and maintain 
     safeguards and internal controls to ensure the following:
       ``(1) There is a record in each executive agency of each 
     holder of a purchase card issued by the agency for official 
     use, annotated with the limitations on single transactions 
     and total transactions that are applicable to the use of each 
     such card or check by that purchase card holder.
       ``(2) Each purchase card holder and individual issued a 
     convenience check is assigned an approving official other 
     than the card holder with the authority to approve or 
     disapprove transactions.
       ``(3) The holder of a purchase card and each official with 
     authority to authorize expenditures charged to the purchase 
     card are responsible for--
       ``(A) reconciling the charges appearing on each statement 
     of account for that purchase card with receipts and other 
     supporting documentation; and
       ``(B) forwarding a summary report to the certifying 
     official in a timely manner of information necessary to 
     enable the certifying official to ensure that the Federal 
     Government ultimately pays only for valid charges that are 
     consistent with the terms of the applicable Government-wide 
     purchase card contract entered into by the Administrator of 
     General Services.
       ``(4) Any disputed purchase card charge, and any 
     discrepancy between a receipt and other supporting 
     documentation and the purchase card statement of account, is 
     resolved in the manner prescribed in the applicable 
     Government-wide purchase card contract entered into by the 
     Administrator of General Services.
       ``(5) Payments on purchase card accounts are made promptly 
     within prescribed deadlines to avoid interest penalties.
       ``(6) Rebates and refunds based on prompt payment, sales 
     volume, or other actions by the agency on purchase card 
     accounts are reviewed for accuracy and properly recorded as a 
     receipt to the agency that pays the monthly bill.
       ``(7) Records of each purchase card transaction (including 
     records on associated contracts, reports, accounts, and 
     invoices) are retained in accordance with standard Government 
     policies on the disposition of records.
       ``(8) Periodic reviews are performed to determine whether 
     each purchase card holder has a need for the purchase card.
       ``(9) Appropriate training is provided to each purchase 
     card holder and each official with responsibility for 
     overseeing the use of purchase cards issued by the executive 
     agency.
       ``(10) The executive agency has specific policies regarding 
     the number of purchase cards issued by various component 
     organizations and categories of component organizations, the 
     credit limits authorized for various categories of card 
     holders, and categories of employees eligible to be issued 
     purchase cards, and that those policies are designed to 
     minimize the financial risk to the Federal Government of the 
     issuance of the purchase cards and to ensure the integrity of 
     purchase card holders.
       ``(11) The executive agency uses effective systems, 
     techniques, and technologies to prevent or identify illegal, 
     improper, or erroneous purchases.
       ``(12) The executive agency invalidates the purchase card 
     of each employee who--
       ``(A) ceases to be employed by the agency, immediately upon 
     termination of the employment of the employee; or
       ``(B) transfers to another unit of the agency, immediately 
     upon the transfer of the employee unless the agency 
     determines that the units are covered by the same purchase 
     card authority.
       ``(13) The executive agency takes steps to recover the cost 
     of any illegal, improper, or erroneous purchase made with a 
     purchase card or convenience check by an employee, including, 
     as necessary, through salary offsets.
       ``(b) Guidance.--The Director of the Office of Management 
     and Budget shall review existing guidance and, as necessary, 
     prescribe additional guidance governing the implementation of 
     the requirements of subsection (a) by executive agencies.
       ``(c) Penalties for Violations.--
       ``(1) In general.--The head of each executive agency shall 
     provide for appropriate adverse personnel actions or other 
     punishment to be imposed in cases in which employees of the 
     agency violate agency policies implementing the guidance 
     required by subsection (b) or make illegal, improper, or 
     erroneous purchases with purchase cards or convenience 
     checks.
       ``(2) Dismissal.--Penalties prescribed for employee misuse 
     of purchase cards or convenience checks shall include 
     dismissal of the employee, as appropriate.
       ``(3) Reports on violations.--The guidance prescribed under 
     subsection (b) shall direct each head of an executive agency 
     with more than $10,000,000 in purchase card spending 
     annually, and each Inspector General of such an executive 
     agency, on a semiannual basis, to submit to the Director of 
     the Office of Management and Budget a joint report on 
     violations or other actions covered by paragraph (1) by 
     employees of such executive agency. At a minimum, the report 
     shall set forth the following:
       ``(A) A summary description of confirmed violations 
     involving misuse of a purchase card following completion of a 
     review by the agency or by the Inspector General of the 
     agency.
       ``(B) A summary description of all adverse personnel 
     action, punishment, or other action taken based on each 
     violation.
       ``(d) Risk Assessments and Audits.--The Inspector General 
     of each executive agency shall--
       ``(1) conduct periodic assessments of the agency purchase 
     card or convenience check programs to identify and analyze 
     risks of illegal, improper, or erroneous purchases and 
     payments in order to develop a plan for using such risk 
     assessments to determine the scope, frequency, and number of 
     periodic audits of purchase card or convenience check 
     transactions;
       ``(2) perform analysis or audits, as necessary, of purchase 
     card transactions designed to identify--
       ``(A) potentially illegal, improper, or erroneous uses of 
     purchase cards;
       ``(B) any patterns of such uses; and
       ``(C) categories of purchases that could be made by means 
     other than purchase cards in order to better aggregate 
     purchases and obtain lower prices (excluding transactions 
     made under card-based strategic sourcing arrangements);
       ``(3) report to the head of the executive agency concerned 
     on the results of such analysis or audits; and

[[Page H5412]]

       ``(4) report to the Director of the Office of Management 
     and Budget on the implementation of recommendations made to 
     the head of the executive agency to address findings of any 
     analysis or audit of purchase card and convenience check 
     transactions or programs for compilation and transmission by 
     the Director to Congress and the Comptroller General.
       ``(e) Relationship to Department of Defense Purchase Card 
     Regulations.--The requirements of this section shall not 
     apply to the Department of Defense. See section 2784 of title 
     10 for provisions relating to management of purchase cards in 
     the Department.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 19 of title 41, United States Code, is 
     amended by adding at the end the following new item:

``1909. Management of purchase cards.''.

       (b) Conforming Amendments to Department of Defense Purchase 
     Card Provisions.--Subsection (b) of section 2784 of title 10, 
     United States Code, is amended--
       (1) by moving paragraph (8) to the end of the subsection 
     and redesignating that paragraph as paragraph (14);
       (2) by redesignating paragraphs (2), (3), (4), (5), (6), 
     and (7) as paragraphs (3), (4), (5), (6), (7), and (8), 
     respectively;
       (3) by inserting after paragraph (1) the following new 
     paragraph (2):
       ``(2) That each purchase card holder and individual issued 
     a convenience check is assigned an approving official other 
     than the card holder with the authority to approve or 
     disapprove transactions.'';
       (4) by adding after paragraph (10) the following new 
     paragraphs:
       ``(11) That the Department of Defense uses effective 
     systems, techniques, and technologies to prevent or identify 
     potential fraudulent purchases.
       ``(12) That the Department of Defense takes appropriate 
     steps to invalidate the purchase card of each card holder 
     who--
       ``(A) in the case of an employee of the Department--
       ``(i) ceases to be employed by the Department, immediately 
     upon termination of the employment of the employee; or
       ``(ii) transfers to another unit of the Department, 
     immediately upon the transfer of the employee unless the 
     Secretary of Defense determines that the units are covered by 
     the same purchase card authority; and
       ``(B) in the case of a member of the armed forces, is 
     separated or released from active duty or full-time National 
     Guard duty.
       ``(13) That the Department of Defense takes steps to 
     recover the cost of any illegal, improper, or erroneous 
     purchase made with a purchase card or convenience check by an 
     employee or member of the armed forces, including, as 
     necessary, through salary offsets.''; and
       (5) by adding at the end the following new paragraph:
       ``(15) That the Inspector General of the Department of 
     Defense conducts periodic audits or reviews of purchase card 
     or convenience check programs to identify and analyze risks 
     of illegal, improper, or erroneous purchases and payments and 
     that the findings of such audits or reviews, along with 
     recommendations to prevent abuse of purchase cards or 
     convenience checks, are reported to the Director of the 
     Office of Management and Budget and Congress.''.
       (c) Deadline for Guidance on Management of Purchase 
     Cards.--The Director of the Office of Management and Budget 
     shall prescribe the guidance required by section 1909(b) of 
     title 41, United States Code, as added by subsection (a), not 
     later than 180 days after the date of the enactment of this 
     Act.

     SEC. 3. MANAGEMENT OF TRAVEL CARDS.

       Section 2 of the Travel and Transportation Reform Act of 
     1998 (Public Law 105-264; 5 U.S.C. 5701 note) is amended by 
     adding at the end the following new subsection:
       ``(h) Management of Travel Charge Cards.--
       ``(1) Required safeguards and internal controls.--The head 
     of each executive agency that has employees that use travel 
     charge cards shall establish and maintain the following 
     internal control activities to ensure the proper, efficient, 
     and effective use of such travel charge cards:
       ``(A) There is a record in each executive agency of each 
     holder of a travel charge card issued on behalf of the agency 
     for official use, annotated with the limitations on amounts 
     that are applicable to the use of each such card by that 
     travel charge card holder.
       ``(B) Rebates and refunds based on prompt payment, sales 
     volume, or other actions by the agency on travel charge card 
     accounts are monitored for accuracy and properly recorded as 
     a receipt of the agency that employs the card holder.
       ``(C) Periodic reviews are performed to determine whether 
     each travel charge card holder has a need for the travel 
     charge card.
       ``(D) Appropriate training is provided to each travel 
     charge card holder and each official with responsibility for 
     overseeing the use of travel charge cards issued by the 
     executive agency.
       ``(E) Each executive agency has specific policies regarding 
     travel charge cards issued for various component 
     organizations and categories of component organizations, the 
     credit limits authorized for various categories of card 
     holders, and categories of employees eligible to be issued 
     travel charge cards, and designs those policies to minimize 
     the financial risk to the Federal Government of the issuance 
     of the travel charge cards and to ensure the integrity of 
     travel charge card holders.
       ``(F) Each executive agency has policies to ensure its 
     contractual arrangement with each travel charge card issuing 
     contractor contains a requirement that the creditworthiness 
     of an individual be evaluated before the individual is issued 
     a travel charge card, and that no individual be issued a 
     travel charge card if that individual is found not 
     creditworthy as a result of the evaluation (except that this 
     paragraph shall not preclude issuance of a restricted use, 
     prepaid, declining balance, controlled-spend, or stored value 
     card when the individual lacks a credit history or has a 
     credit score below the minimum credit score established by 
     the Director of the Office of Management and Budget). The 
     Director of the Office of Management and Budget shall 
     establish a minimum credit score for determining the 
     creditworthiness of an individual based on rigorous 
     statistical analysis of the population of card holders and 
     historical behaviors. Notwithstanding any other provision of 
     law, such evaluation shall include an assessment of an 
     individual's consumer report from a consumer reporting agency 
     as those terms are defined in section 603 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681a).
       ``(G) Each executive agency uses effective systems, 
     techniques, and technologies to prevent or identify improper 
     purchases.
       ``(H) Each executive agency ensures that the travel charge 
     card of each employee who ceases to be employed by the agency 
     is invalidated immediately upon termination of the employment 
     of the employee (or, in the case of a member of the uniformed 
     services, upon separation or release from active duty or 
     full-time National Guard duty).
       ``(I) Each executive agency shall ensure that, where 
     appropriate, travel card payments are issued directly to the 
     travel card-issuing bank for credit to the employee's 
     individual travel card account.
       ``(2) Guidance on management of travel charge cards.--Not 
     later than 180 days after the date of the enactment of the 
     Government Charge Card Abuse Prevention Act of 2012, the 
     Director of the Office of Management and Budget shall review 
     the existing guidance and, as necessary, prescribe additional 
     guidance for executive agencies governing the implementation 
     of the requirements in paragraph (1).
       ``(3) Inspector general audit.--The Inspector General of 
     each executive agency with more than $10,000,000 in travel 
     card spending shall conduct periodic audits or reviews of 
     travel card programs to analyze risks of illegal, improper, 
     or erroneous purchases and payments. The findings of such 
     audits or reviews along with recommendations to prevent 
     improper use of travel cards shall be reported to the 
     Director of the Office of Management and Budget and Congress.
       ``(4) Penalties for violations.--Consistent with the 
     guidance prescribed under paragraph (2), each executive 
     agency shall provide for appropriate adverse personnel 
     actions to be imposed in cases in which employees of the 
     executive agency fail to comply with applicable travel charge 
     card terms and conditions or applicable agency regulations or 
     commit fraud with respect to a travel charge card, including 
     removal in appropriate cases.
       ``(5) Definitions.--In this subsection:
       ``(A) Executive agency.--The term `executive agency' means 
     an agency as that term is defined in subparagraphs (A) and 
     (B) of section 5701(1) of title 5, United States Code.
       ``(B) Travel charge card.--The term `travel charge card' 
     means any Federal contractor-issued travel charge card that 
     is individually billed to each card holder.''.

     SEC. 4. MANAGEMENT OF CENTRALLY BILLED ACCOUNTS.

       (a) Required Internal Controls for Centrally Billed 
     Accounts.--The head of an executive agency that has employees 
     who use a travel charge card that is billed directly to the 
     United States Government shall establish and maintain the 
     following internal control activities:
       (1) The executive agency shall ensure that officials with 
     the authority to approve official travel verify that 
     centrally billed account charges are not reimbursed to an 
     employee.
       (2) The executive agency shall dispute unallowable and 
     erroneous charges and track the status of the disputed 
     transactions to ensure appropriate resolution.
       (3) The executive agency shall submit requests to servicing 
     airlines for refunds of fully or partially unused tickets, 
     when entitled to such refunds, and track the status of unused 
     tickets to ensure appropriate resolution.
       (b) Guidance.--Not later than 180 days after the date of 
     the enactment of this Act, the Director of the Office of 
     Management and Budget shall review the existing guidance and, 
     as necessary, prescribe additional guidance for executive 
     agencies implementing the requirements of subsection (a).

     SEC. 5. DEFINITIONS.

       In this Act:
       (1) Executive agency.--The term ``executive agency'' has 
     the meaning given such term in section 133 of title 41, 
     United States Code.
       (2) Employee.--The term ``employee'' has the meaning given 
     such term in section 2(d)(3) of the Travel and Transportation 
     Reform Act of 1998 (Public Law 105-264; 5 U.S.C. 5701 note).

     SEC. 6. CONSTRUCTION.

       (a) Executive Agency Accounting.--Nothing in this Act, or 
     the amendments made by this Act, shall be construed to excuse 
     the head of an executive agency from the responsibilities set 
     out in section 3512 of title 31, United States Code, or in 
     the Improper Payments Information Act of 2002 (31 U.S.C. 3321 
     note).
       (b) Personal Information.--Nothing in this Act, or the 
     amendments made by this Act, shall be construed to require 
     the disclosure of personally identifying information that is 
     otherwise protected from disclosure under section 552a of 
     title 5, United States Code (popularly known as the Privacy 
     Act of 1974).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from

[[Page H5413]]

Utah (Mr. Chaffetz) and the gentlewoman from New York (Mrs. Maloney) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Utah.
  Mr. CHAFFETZ. Mr. Speaker, I yield myself such time as I may consume.


                             General Leave

  Mr. CHAFFETZ. I ask unanimous consent that all Members may have 5 
legislative days within which to revise and extend their remarks and 
include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Utah?
  There was no objection.
  Mr. CHAFFETZ. S. 300 puts commonsense controls on the users of 
government charge cards which allow Federal workers to purchase goods 
and to travel in a timely and cost-efficient manner. In any economy, 
but especially the one we're in now, there is no room for waste, much 
less fraud and abuse. These safeguards will make all users of Federal 
charge cards accountable for their use.
  While the use of charge cards has saved the Federal Government both 
time and money when compared to a paper reimbursement system, some 
Federal employees have abused their purchase and travel card 
privileges, resulting in unnecessary and sometimes fraudulent expenses.
  Numerous GAO reports over the last decade have called for additional 
controls to prevent waste, fraud, and abuse in the government charge 
card program. In 2008, GAO estimated that nearly 41 percent of purchase 
card transactions failed to meet basic internal control standards.
  Senator Grassley has put the spotlight on the problematic use of 
government charge cards for more than a decade, and the GAO has 
documented fraudulent purchases made by Federal workers with these 
cards, including jewelry, gambling, cruises, and even the tab at 
gentlemen's clubs. Government charge cards were used to pay for the 
infamous GSA 2010 Western Regional Conference.
  The Oversight Committee was able to work on a bipartisan basis with 
the Armed Services Committee to bring Senator Grassley's bill, S. 300, 
to the floor today. The bill brings needed accountability to the 
process by which the Federal Government manages charge cards used by 
Federal employees.
  S. 300 requires agencies to improve their internal controls for 
government charge cards. It is based largely on GAO's recommendations 
for preventing waste, fraud, and abuse. The additional safeguards 
resulting from the bill will avoid the waste of millions of dollars of 
taxpayer money on fraudulent or questionable purposes. The controls 
also help ensure the Federal Government benefits from rebates available 
from charge card vendors for prompt payment.
  S. 300 requires agency inspectors general to periodically conduct 
risk assessments and perform audits to identify potential abuse of 
government charge cards. The bill also requires agencies to take 
appropriate disciplinary action, including removal, for Federal 
employees who misuse charge cards. This provision responds to GAO 
investigations that found inconsistent or nonexistent consequences for 
Federal employees who abuse these charge card privileges.
  I will be placing into the Record a jurisdictional exchange of 
letters between the Committee on Armed Services and the Committee on 
Oversight and Government Reform.
  With that, Mr. Speaker, I reserve the balance of my time.

                                      Committee on Armed Services,


                                     House of Representatives,

                                Washington, DC, February 14, 2012.
     Hon. Darrell E. Issa,
     Chairman, Committee on Oversight and Government Reform, House 
         of Representatives, Washington, DC.
       Dear Chairman Issa: I am writing to you concerning the bill 
     S. 300, Government Charge Card Abuse Prevention Act of 2011, 
     as amended. This legislation includes provisions that deal 
     with the Department of Defense policies regarding government 
     charge cards which fall within the Rule X jurisdiction of the 
     Committee on Armed Services.
       Our committee recognizes the importance of S. 300, and the 
     need for the legislation to move expeditiously. Therefore, 
     while we have a valid claim to jurisdiction over this 
     legislation, the Committee on Armed Services will waive 
     further consideration of S. 300. I do so with the 
     understanding that by waiving consideration of the bill, the 
     Committee on Armed Services does not waive any future 
     jurisdictional claim over the subject matters contained in 
     the bill which fall within its Rule X jurisdiction. I 
     appreciate your willingness to work with the Committee on 
     Armed Services to incorporate modifications requested by the 
     Office of the Secretary of Defense to the legislation to be 
     considered in the House. I request that you urge the Speaker 
     to name members of this committee to any conference committee 
     which is named to consider these provisions.
       Please place this letter and your committee's response into 
     the Congressional Record during consideration of the measure 
     on the House floor. Thank you for the cooperative spirit in 
     which you have worked regarding this matter and others 
     between our respective committees.
           Sincerely,
                                        Howard P. ``Buck'' McKeon,
     Chairman.
                                  ____

         Committee on Oversight and Government Reform, House of 
           Representatives,
                                Washington, DC, February 23, 2012.
     Hon. Howard P. ``Buck'' McKeon,
     Chairman, Committee on Armed Services, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman:  Thank you for your letter regarding the 
     Committee on Armed Services' jurisdictional interest in S. 
     300, the ``Government Charge Card Abuse Prevention Act of 
     2011,'' and your willingness to forego consideration of S. 
     300 by your committee.
       I agree that the Armed Services Committee has a valid 
     jurisdictional interest in certain provisions of S. 300 and 
     that the Committee's jurisdiction will not be adversely 
     affected by your decision to forego consideration of the 
     bill. As you have requested, I will support your request for 
     an appropriate appointment of outside conferees from your 
     Committee in the event of a House-Senate conference on this 
     or similar legislation should such a conference be convened.
       Finally, I will include a copy of your letter and this 
     response in the Congressional Record during the floor 
     consideration of this bill. Thank you again for your 
     cooperation.
           Sincerely,
                                                     Darrell Issa,
                                                         Chairman.

  Mrs. MALONEY. Mr. Speaker, I yield myself such time as I may consume.
  The serious fiscal challenges facing the Federal Government demand 
that agencies do everything they can to operate as efficiently as 
possible. The Federal Government spends billions annually through its 
purchase card programs, using purchase cards and convenience checks to 
acquire millions of items--everything from paper and pencils to 
computers--and to make payments on government contracts for a variety 
of goods and services such as vehicles and relocation services.
  The primary responsibility for purchasing these items rests with 
cardholders and the officials who approve their purchases. Because of 
the position of public trust held by Federal employees, Congress and 
the American people expect cardholders and approving officials to 
maintain stewardship over the Federal funds at their disposal. 
Specifically, purchase cardholders and approving officials are expected 
to follow published acquisition requirements and exercise a standard of 
care in acquiring goods and services that is necessary and reasonable 
for the proper operation of an agency.
  Because every Federal dollar that is spent on fraudulent, improper, 
and abusive purchases is a dollar that cannot be used for necessary 
government goods and services, ensuring that purchase cards are used 
responsibly is of particular concern at a time when the United States 
is experiencing substantial fiscal challenges.
  I strongly support Senator Grassley's bill, on which he has worked 
many years, S. 300, because the legislation will require agencies to 
establish internal control activities over travel and charge cards. 
Agencies will be able to perform credit checks on potential recipients 
of travel cards. Agencies will also be able to appropriately discipline 
employees who misuse charge cards, including termination of their 
employment.
  Most importantly, this legislation will keep agencies accountable for 
charge card misuse because the inspectors general of each agency will 
be required to examine charge card use twice a year and report any 
violations to the Office of Management and Budget.
  I urge my colleagues to support this bill, and I yield back the 
balance of my time.
  Mr. CHAFFETZ. I appreciate the great work Senator Grassley has done 
on this bill. I urge its adoption. I think

[[Page H5414]]

we can do so in a bipartisan way, and I urge a ``yes'' vote.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Utah (Mr. Chaffetz) that the House suspend the rules and 
pass the bill, S. 300, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mrs. MALONEY. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.
  The point of no quorum is considered withdrawn.

                          ____________________