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Calendar No. 169
115th Congress} { Report
SENATE
1st Session } { 115-129
____________________________________________________________________
SAVING FEDERAL DOLLARS THROUGH
BETTER USE OF GOVERNMENT PURCHASE AND TRAVEL CARDS ACT OF 2017
__________
R E P O R T
OF THE
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
TO ACCOMPANY
S. 1099
TO PROVIDE FOR THE IDENTIFICATION AND PREVENTION OF
IMPROPER PAYMENTS AND THE IDENTIFICATION OF STRATEGIC
SOURCING OPPORTUNITIES BY REVIEWING AND ANALYZING THE USE OF FEDERAL
AGENCY CHARGE CARDS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
July 11, 2017.--Ordered to be printed
__________
U.S. GOVERNMENT PUBLISHING OFFICE
WASHINGTON : 2017
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana KAMALA D. HARRIS, California
Christopher R. Hixon, Staff Director
Gabrielle D'Adamo Singer, Chief Counsel
Daniel J. Spino, Research Assistant
Margaret E. Daum, Minority Staff Director
Stacia M. Cardille, Minority Chief Counsel
Charles A. Moskowitz, Minority Senior Legislative Counsel
Katherine C. Sybenga, Minority Counsel
Laura W. Kilbride, Chief Clerk
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Calendar No. 169
115th Congress} { Report
SENATE
1st Session } { 115-129
======================================================================
SAVING FEDERAL DOLLARS THROUGH BETTER USE OF GOVERNMENT PURCHASE AND
TRAVEL CARDS ACT OF 2017
_______
July 11, 2017.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 1099]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 1099) to provide
for the identification and prevention of improper payments and
the identification of strategic sourcing opportunities by
reviewing and analyzing the use of Federal agency charge cards,
having considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and the Need for Legislation..........................2
III. Legislative History..............................................4
IV. Section-by-Section Analysis......................................4
V. Evaluation of Regulatory Impact..................................5
VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............6
I. PURPOSE AND SUMMARY
S. 1099 authorizes the existing Office of Charge Card
Management within the General Services Administration (GSA)
review and analyze the use of charge cards by employees of the
Federal government to identify trends of abuses of charge and
travel cards as well as opportunities for strategic sourcing.
The legislation also requires the Office of Management and
Budget (OMB) to issue new guidance to agencies for the
oversight and administration of Federal charge cards. In
addition, S. 1099 establishes an interagency task force to
develop and share best practices, requires the development of
an interagency library of analytics tools and data sets for use
in managing charge card transactions, and sets requirements for
GSA and other agencies to report to Congress on implementation
of the bill.\1\
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\1\On June 24, 2015, the Committee approved S. 1616, Saving Federal
Dollars Through Better Use of Government Purchase and Travel Cards Act
of 2015. That bill is substantially similar in purpose to S. 1099.
Accordingly, this committee report is in large part a reproduction of
Chairman Johnson's committee report for S. 1616, S. Rep. No. 114-174.
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II. BACKGROUND AND THE NEED FOR LEGISLATION
The use of Federal agency purchase cards and travel cards
poses ongoing challenges and opportunities for Federal
agencies. Improved oversight, controls and analysis of Federal
charge card use could result in reduced improper payments and
misuse. The Federal Government could also analyze charge card
use for potential savings through strategic sourcing
opportunities.
Federal charge cards have been the subject of congressional
hearings and Office of Inspector General (OIG) reviews
highlighting their misuse. For example, the misuse of
government travel cards by the Department of Defense (DOD)
employees at casinos and adult entertainment establishments was
the subject of a DOD OIG report in 2015.\2\ That OIG report
detailed specific steps needed for improved oversight by the
DOD, many of which could also be adopted by other agencies.
Similar problems at the DOD spurred a 2006 Committee
hearing,\3\ and a subcommittee of the House Oversight and
Government Reform Committee also held a hearing on the misuse
of Federal charge cards for high-end gym memberships, gift
cards, and hair salons.\4\ The misuse of Federal purchase cards
within the Department of Veterans Affairs, where cardholders at
the agency appeared to have avoided using competitive bidding
by breaking up large purchases into many smaller ones, was also
the topic of news articles and a congressional hearing.\5\ The
Government Accountability Office has also issued reports
recommending action to curb abuse and improper payments.\6\
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\2\Department of Defense Office of Inspector General, DOD
Cardholders Used Their Government Travel Cards for Personal Use at
Casinos and Adult Entertainment Establishments (2015), available at
http://www.dodig.mil/pubs/documents/DODIG-2015-125.pdf.
\3\DHS Purchase Cards: Credit without Accountability: Hearing
Before the Comm. on Homeland Sec. & Governmental Affairs, 109th Cong.
(2006), available at http://www.hsgac.senate.gov/hearings/dhs-purchase-
cards-credit-without-accountability.
\4\Gym Memberships, Gift Cards and Hair Salons: Examining the
Misuse of Government-Supplied Credit Cards: Hearing Before the H.
Subcomm. on Government Operations, 113th Cong. (2014), available at
https://oversight.house.gov/hearing/gym-memberships-gift-cards-hair-sa-
lons-examining-misuse-government-supplied-credit-cards/.
\5\Lisa Rein, The mysterious case of $54 million VA spent on
prosthetics in $24,999 payments, The Washington Post (June 16, 2015),
available at http://www.washingtonpost.com/blogs/federal-eye/wp/2015/
06/16/the-mysterious-case-of-54-million-va-spent-on-prosthetics-in-
24999-payments/; Waste, Fraud, and Abuse in the VA Purchase Card
Program: Hearing Before the H. Comm. on Veterans Affairs, 114th Cong.
(2015), available at https://veterans.house.gov/hearing/waste-fraud-
and-abuse-in-va-s-purchase-card-program.
\6\See, e.g., Gov't Accountability Office, GAO-08-333,
Governmentwide Purchase Cards: Actions Needed to Strengthen Internal
Controls to Reduce Fraudulent, Improper, and Abusive Purchases (2008),
available at http://www.gao.gov/new.items/d08333.pdf.
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The oversight of Federal purchase cards also has been a
focus of previous Committee legislation. In 2012, the Committee
favorably reported the Government Charge Card Abuse Prevention
Act, sponsored by Senator Charles Grassley, which was signed
into law later that year.\7\ The law requires agencies to
establish safeguards and internal controls for charge cards,
including use of systems and technologies to identify illegal,
improper, or erroneous purchases. The law also requires annual
reporting by Federal agencies and OMB, as well as periodic risk
assessments by Inspectors General of agency purchase card
programs.
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\7\Pub. L. No. 112-194 (112th Cong.).
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The Obama administration also took action to strengthen
Federal charge card oversight during the past several years. In
2014, President Obama signed Executive Order 13681, Improving
the Security of Consumer Financial Transactions, which included
the promotion of more secure charge card operations for Federal
agencies.\8\ Also, the OMB Circular A-123 Appendix B, Improving
the Management of Government Charge Card Programs, detailed
improved policies and procedures for federal charge card
programs.\9\
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\8\Exec. Order No. 13681, available at https://
obamawhitehouse.archives.gov/the-press-office/2014/10/17/executive-
order-improving-security-consumer-financial-transactions.
\9\OMB Circular A-123, App. B, available at https://
www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A123/
a123_appendix_b.pdf.
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However, there is still a clear need for strengthening and
improving Federal oversight and administration by Federal
agencies of charge card programs. While agencies are required
to individually develop new oversight techniques to discuss
misuse, there is no consistent method for Federal agencies to
quickly share the identified fraud schemes or oversight
techniques, such as those identified by the DOD OIG.\10\ In
addition, not all government agencies have established robust
data mining, or anti-waste and fraud analytics, for their
charge card programs. The Federal Government could also do a
better job surveying agency-wide purchase card data to identify
ways to improve efficiency, as well as taking aggressive
efforts to recover inappropriately spent dollars.
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\10\Department of Defense Office of Inspector General, DOD
Cardholders Used Their Government Travel Cards for Personal Use at
Casinos and Adult Entertainment Establishments (2015), available at
http://www.dodig.mil/pubs/documents/DODIG-2015-125.pdf.
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Of the two types of charge cards, travel cards and purchase
cards, purchase cards present the greater risk to taxpayers. In
most cases, individual employees are only reimbursed for
authorized charges on travel cards and must pay for any
unauthorized charges using their own personal funds. On the
other hand, in most cases, agencies pay the entire monthly bill
for purchase cards and can only identify unauthorized charges
after they have already been paid.
Still, travel cards data presents insight into the travel
patterns of agencies and can help GSA identify things like
excess conference spending, first-class travel, and travel
charges incurred near the employee's home. Many of these
charges may not be fraudulent, and likely were approved by
supervisors.
Similarly, purchase cards--due to the structured,
electronic nature of the transactions--provide government-wide
insight into small-dollar spending patterns that is not
available elsewhere, such as USAspending.gov. GSA analytics can
use this information to find ways to save money.
The Saving Federal Dollars Through Better Use of Government
Purchase and Travel Cards Act of 2017 would improve anti-waste
and fraud analysis and facilitate the sharing of information
about charge card abuse and best practices among Federal
agencies. The legislation would also establish procedures to
identify strategic sourcing opportunities through analysis of
Federal charge card transactions.
The bill instructs the GSA to develop a strategy to review
charge card purchases to better identify patterns of
questionable transactions and recover improper payments. GSA
already collects charge card transaction data in its
administrative role of overseeing Federal agency charge card
programs. S. 1099 is intended to require GSA to assist agencies
in their ongoing oversight responsibilities through the
analysis of the transaction data.
S. 1099 builds on the 2012 Government Charge Card Abuse
Prevention Act, which required agencies to establish certain
types of control and oversight over the agency's charge card
usage.\11\ Under S. 1099, GSA would assist agencies by
conducting sophisticated, government-wide analysis for
potential waste and fraud schemes, high-risk sellers and other
risks of charge card misuse, and share best practices across
the Federal Government.
Finally, the legislation would facilitate analysis of
government-wide purchase card data spending patterns to better
leverage Federal Government purchasing power when buying in
bulk. This is often called ``strategic sourcing,'' and has
become a proven way to save taxpayer funds.\12\
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\11\Pub. L. No. 112-194 (112th Cong.).
\12\Gov't Accountability Office, GAO-13-417, Strategic Sourcing:
Leading Commercial Practices Can Help Federal Agencies Increase Savings
When Acquiring Services (2013), available at http://www.gao.gov/
products/GAO-13-417.
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III. LEGISLATIVE HISTORY
Senator Tom Carper, Ranking Member Claire McCaskill, and
Senator Charles Grassley introduced S. 1099, the Saving Federal
Dollars through Better Use of Government Purchase and Travel
Cards Act of 2017, on May 11, 2017. The bill was referred to
the Homeland Security and Governmental Affairs Committee.
The Committee considered S. 1099 at a business meeting on
May 17th, 2017. The bill was ordered reported favorably en bloc
by voice vote. Members present for the vote on the bill were
Senators Johnson, McCain, Portman, Paul, Lankford, Enzi,
Hoeven, Daines, McCaskill, Tester, Heitkamp, Peters, Hassan,
and Harris.
IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED
Section 1. Short title
This section presents the bill's title as ``Saving Federal
Dollars Through Better Use of Government Purchase and Travel
Cards Act of 2017.''
Sec. 2. Definitions
This section provides definitions for ``Improper Payment,''
``Questionable Transaction,'' and ``Strategic Sourcing.''
Sec. 3. Expanded use of data analytics
This section instructs OMB and GSA to develop a strategy to
better use data analytics in overseeing travel and purchase
cards. It states that GSA's existing capabilities should
suffice. The purpose of the analytics expanded use is to (1)
identify patterns or trends of questionable transactions, (2)
find potential areas for agencies to further use streamlining
processes and cost reduction practices, (3) develop metrics for
high-risk activities, and (4) devise a plan to create a library
of analytic tools for agencies.
Sec. 4. Guidance on improving information sharing to curb improper
payments
This section states that no later than 180 days after this
bill is enacted, the director of OMB, the Administrator of GSA
and the interagency charge card data management group
established in section 5 shall issue guidance to improve
information sharing by (1) requiring Federal agencies to
identify high-risk activities and communicate that information,
(2) requiring Federal agencies to review reports by charge
card-issuing banks on possible fraud or improper transactions,
(3) share information that may be related to potential
questionable transactions, (4) consider recommendations made by
Inspectors General, and (5) include other requirements
determined by the Director to carry out the bill.
Section 5. Interagency Charge Card Data Management Group
This section creates the Interagency Charge Card Data
Management Group to develop and share best practices. In
addition to creating the group it lays out rules, oversight,
and membership of the management group.
Section 6. Reporting requirements
No later than one year after the enactment of the bill, GSA
shall submit a report to Congress on its implementation. In
addition to the report to Congress, the head of each Federal
agency described in the Government Charge Card Abuse Prevention
Act of 2012 shall submit a report to OMB. OMB shall also submit
a report to Congress about the implementation of the bill. GSA
shall submit a report to Congress identifying further potential
saving opportunities for government agencies under the Federal
charge program.
V. EVALUATION OF REGULATORY IMPACT
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
July 5, 2017.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1099, the Saving
Federal Dollars Through Better Use of Government Purchase and
Travel Cards Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall.
Enclosure.
S. 1099--Saving Federal Dollars Through Better Use of Government
Purchase and Travel Cards Act of 2017
S. 1099 would increase oversight of federal agencies' use
of purchase and travel charge cards. The legislation would
require the Office of Management and Budget and the General
Services Administration (GSA) to develop a strategy to enhance
the analysis of data to detect improper use of such cards. The
bill also would establish an interagency task force to
facilitate the sharing of information about the use of federal
charge cards and to promote best practices to reduce fraud and
improper payments. Finally, S. 1099 would require agencies to
report to the Congress on the use of such cards.
Information from the GSA suggests that most provisions of
the bill would codify current policy and practice. Under
current law and policy, agencies have many tools to combat
fraud and misuse related to charge cards. Agencies have
coordinators to oversee the use of charge cards; they also use
tools such as credit limits, blocks on merchants based on the
type of business, activity reports, and employee guides that
explain best practices for using federal charge cards. In
addition, the 73 Inspector Generals (IG) and their 13,000
employees spend about $2.7 billion a year to detect and deter
fraud, waste, and mismanagement of government funds. Because of
those ongoing activities, CBO estimates that implementing the
bill would not significantly increase costs.
The bill could affect direct spending by agencies not
funded through annual appropriations; therefore, pay-as-you-go
procedures apply. CBO estimates, however, that any net increase
in spending by those agencies would not be significant.
Enacting S. 1099 would not affect revenues.
CBO estimates that enacting S. 1099 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
S. 1099 contains no intergovernmental or private-sector
mandates as defined in Unfunded Mandates Reform Act and would
not affect the budgets of state, local, or tribal governments.
The CBO staff contact for this estimate is Matthew
Pickford. This estimate was approved by Theresa Gullo,
Assistant Director for Budget Analysis.
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
Because this legislation would not repeal or amend any
provision of current law, it would not make changes in existing
law within the meaning of clauses (a) and (b) of paragraph 12
of rule XXVI of the Standing Rules of the Senate.
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