[112th Congress Public Law 194]
[From the U.S. Government Printing Office]
[[Page 126 STAT. 1445]]
Public Law 112-194
112th Congress
An Act
To prevent abuse of Government charge cards. <<NOTE: Oct. 5, 2012 - [S.
300]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Government
Charge Card Abuse Prevention Act of 2012. 41 USC 101 note.>>
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. <<NOTE: 41 USC 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) <<NOTE: Records.>> 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
[[Page 126 STAT. 1446]]
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) <<NOTE: Reviews. Records.>> 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) <<NOTE: Records.>> 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) <<NOTE: Reviews.>> 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 <<NOTE: Review.>> 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.
[[Page 126 STAT. 1447]]
``(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 <<NOTE: Reports.>> 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
``(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);
[[Page 126 STAT. 1448]]
(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) <<NOTE: Audits. Recommenda- tions. Reports.>> 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) <<NOTE: 41 USC 1909 note.>> 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:
[[Page 126 STAT. 1449]]
``(A) <<NOTE: Record.>> 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) <<NOTE: Reviews.>> 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) <<NOTE: Evaluation.>> 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. <<NOTE: Assessment.>> 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).
[[Page 126 STAT. 1450]]
``(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) <<NOTE: Deadline. Review.>> 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) <<NOTE: Recommenda- tions. Reports.>> 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. <<NOTE: 5 USC 5701 note.>> 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) <<NOTE: Verification.>> 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 <<NOTE: Deadline. Review.>> 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).
[[Page 126 STAT. 1451]]
SEC. 5. <<NOTE: 5 USC 5701 note.>> 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. <<NOTE: 5 USC 5701 note.>> 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).
Approved October 5, 2012.
LEGISLATIVE HISTORY--S. 300:
---------------------------------------------------------------------------
HOUSE REPORTS: No. 112-376, Pt. 1 (Comm. on Oversight and Government
Reform).
SENATE REPORTS: No. 112-37 (Comm. on Homeland Security and Governmental
Affairs).
CONGRESSIONAL RECORD:
Vol. 157 (2011):
July 22, considered and passed
Senate.
Vol. 158 (2012):
July 31, Aug. 1, considered and
passed House, amended.
Sept. 21, Senate concurred in House
amendment.
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