1. U.S. General Services Administration Federal Acquisition Service Purchase Management Essentials Camesha Hall Office of Charge Card Management General Services Administration 2014 GSA SmartPay Training Forum July 29 to July 31, 2014

2. Federal Acquisition Service 2 Introduction to the GSA SmartPay Purchase Card

3. Federal Acquisition Service 3 GSA SmartPay Purchase Card Overview GSA SmartPay Purchase Card accounts totaled 300 Thousand Total SmartPay accounts 3.4 Million Purchase Card transactions totaled 11.7 Million Total SmartPay transactions 54.1 Million Purchase Card spend totaled $10.3 Billion Total SmartPay spend $16.5 Billion 22%46%32%

4. Federal Acquisition Service 4 Review of Micro-purchase In accordance with the FAR, a micro-purchase is an acquisition of supplies, goods or services in which the amount does not exceed $3,000.  Limit is $2,000 in the case of construction, $15,000 in the case of contingency operations inside of the United States, and $25,000 in the case of contingency operations outside of the United States  Cardholders cannot split purchases in order to stay below authorized spend limits  Above the micro-purchase threshold, the Purchase Card may be used as an ordering and payment mechanism, but not as a contracting mechanism

5. Federal Acquisition Service 5 Benefits of Purchase Card Use There are a number of benefits to using the GSA SmartPay Purchase Card as a payment solution:  Safety and Transparency – Improves financial controls and provides access to spend data  Electronic Access to Data – Provides online access to accurate, comprehensive transaction detail  Refunds – Agencies/Organizations earn refunds based on dollar volume of transactions  Favorable Pricing – Enhances the government negotiation leverage through strategic sourcing of enterprise data

6. Federal Acquisition Service 6 Legislative and Policy Updates

7. Federal Acquisition Service 7 OMB Memorandum M-13-21 To help agencies comply with P.L. 112-194, the Office of Management and Budget (OMB) released OMB Memo M-13-21, Implementation of Charge Card Abuse and Prevention Act of 2012. The memo addresses:  Reports of Purchase Card Violations  Required Safeguards and Internal Controls  Inspector General Risk Assessments and Audits For further information on OMB Memorandum M-13-21 please visit our website http://smartpay.gsa.gov/about-gsa- smartpay/policies/OMB-M-13-21

8. Federal Acquisition Service 8 Treasury Financial Manual Update OCCM worked with the Department of the Treasury to update the Purchase Card Guidance, which includes the following updates for agencies:  Procedures should encourage the use of cards as a method of contract payment (in accordance with FAR Part 13.301)  Review procedures must include data mining  Take steps to maximize sales and productivity refunds  Increase the use of strategic sourcing programs  Review accounts payable files and analyze spending patterns to find opportunities for savings

9. Federal Acquisition Service 9 Improper Payments Elimination and Recovery Improvement Act of 2012 In accordance with the Public Law 112-248, agencies must take steps to actively mitigate improper payments, fraud, waste, and abuse.  Verify vendors are eligible to receive government payments (including contracts) on Do Not Pay list Next Steps OCCM is working with OMB and the Department of the Treasury to explore the applicability of the Do Not Pay list to charge card transactions.

10. Federal Acquisition Service 10 CBA Tax Exemption All 50 states and U.S. territories exempt direct taxes on GSA SmartPay Purchase Cards, however 13 States require tax exemption forms for CBAs, including:  Florida  Georgia  Louisiana  Michigan  Minnesota  Rhode Island  South Dakota  Tennessee  Texas  Utah  West Virginia  Wisconsin  Wyoming

11. Federal Acquisition Service 11 Purchase Card Management

12. Federal Acquisition Service 12 A/OPC Roles and Responsibilities Agency/Organization Program Coordinators (A/OPC) are liaisons between agency management, GSA SmartPay contractor banks, and cardholders. Roles may differ, but responsibilities could include:  Managing the GSA SmartPay Purchase Card program and promoting proper use  Monitoring for and taking appropriate action in the instances of fraud, waste, or abuse  Audit purchase card accounts and ensuring centrally billed accounts are properly approved  Developing agency/organization-specific policies and procedures, as necessary

13. Federal Acquisition Service 13 AO Roles and Responsibilities Approving Officials (AO) play key roles in preventing fraud, abuse, and misuse. Roles may differ, but responsibilities could include:  Review and approve all GSA SmartPay Purchase Card transactions  Resolves all questionable charges  Monitor employee compliance with charge card regulations/guidance  Certify monthly invoices  Verify receipt of purchases and/or transactions

14. Federal Acquisition Service 14 Cardholder Roles and Responsibilities Cardholders must use the GSA SmartPay Purchase Card card in accordance with agency policy and government regulations.  Keep up to date with program and agency- specific training requirements and communications from A/OPCs (and take appropriate action)  Immediately report a lost or stolen card  Monitor and track expenses, as well as maintain receipts, in accordance with agency policy  Ensure accounts are reconciled in a timely manner and submit full payment for each undisputed bill

15. Federal Acquisition Service 15 Cardholder Roles and Responsibilities Cardholders must NEVER:  Use the purchase card for personal use  Allow monthly bill to become overdue; this could result in suspension or cancellation  Wait for receipt of the monthly bill to file claims  Pay for another employee’s purchase card expense(s)  Write Personal Identification Numbers (PIN) on the GSA SmartPay Purchase Card  Make split purchases

16. Federal Acquisition Service 16 Bank Roles and Responsibilities The GSA SmartPay Program contractor banks – Citibank, JP Morgan Chase, and U.S. Bank – have important responsibilities, which include:  Provide AO or A/OPC the ability to view current statements, payment history, and account information to make payments electronically  Issue required reports to A/OPCs  Provide assistance with audits and investigations

17. Federal Acquisition Service 17 Purchase Card Leading Practices

18. Federal Acquisition Service 18 The Purchase Card and the FAR In accordance with the Federal Acquisition Regulation (FAR), agency procedures should not limit the use of the Purchase Card to micro-purchases. Rather, agency procedures should encourage the use of the Purchase Card in greater dollar amounts by contracting officers to place orders and to pay for purchases against contacts under part 8 procedures when authorized, and to place orders and/or make payment under other contractual instruments, when agreed to by the contractor (FAR Part 13.301).

19. Federal Acquisition Service 19 Opportunities for Expansion Some ideas to consider:  Coordinate with banks to review A/P file to identify opportunities for additional purchase card use  Maximize use of FSSI programs  Further utilize card/cardless payment data as a component of agency strategy to identify/reduce erroneous payments  Explore greater use of card/cardless payment systems for contract payments; include payment option in contract terms and conditions

20. Federal Acquisition Service 20 Uses of Purchase Card GSA SmartPay Purchase Card solutions can be customized to help customer agencies address payment challenges. Consider the following:  Micro-purchases  Contract payments  Grants payment  Stored Value Cards  Declining Balance Cards  Single Use Accounts  Virtual Cards (aka Ghost Cards)

21. Federal Acquisition Service 21 Management Leading Practices Leading practices for more effectively managing a GSA SmartPay Purchase Card Program:  Monitor reports and remind cardholders to pay bills in a timely manner, to avoid becoming delinquent  Publish “Frequently Asked Questions” on the agency/organization’s internal website  Create a monthly newsletter for updates to purchase policies and procedures  Develop automated reports, to eliminate manually performing data analysis

22. Federal Acquisition Service 22 Mitigating Abuse and Misuse Abuse impacts purchase card performance and refund earning potential. Mitigation strategies include:  Emphasize standards of conduct/ethics and clearly state consequences for misuse  Monitor authorization controls and set reasonable transaction limits  Review card activity and restrict spend use through Merchant Category Code (MCC) blocks  Deactivate cards as appropriate  Manage delinquency and implement proper purchase card training

23. Federal Acquisition Service 23 Purchase Card Reporting There are a number of reports available from GSA SmartPay contractor banks to help A/OPCs address transactions, payments, disputes, and delinquencies.  Monitor bank reports regularly to monitor for fraud, abuse, and misuse  Use bank reports proactively, not reactively for payment  Understand available reports**  Develop automated reports Available Reports Reports include, but are not limited to: Account Activity Report Declined Authorizations Report Pre-Suspension Report Transaction Dispute Report Renewal Report ** A full list of reports is available in section C.3.3.1 of the GSA SmartPay2 Master Contract

24. Federal Acquisition Service 24 Purchase Card Deactivation To help streamline purchase card programs and mitigate the risk of fraud, abuse, and misuse, please remember to deactivate accounts that are no longer in use:  A/OPCs can quickly deactivate/reactivate cards electronically or by contacting the bank’s designated representative  If a card is deactivated, authorizations are declined at point of sale  Close charge card accounts for cardholders who leave the agency (will vary by agency policy and business line)

25. Federal Acquisition Service 25 Training Cardholders must take mandatory training and A/OPCs should:  Ensure cardholders fulfill training requirements  Provide a comprehensive face-to-face training as orientation for new cardholders, if possible  Engage in bank-sponsored training  Ensure training is easily accessible  Address standards of conduct/ethics and clearly state consequences for misuse

26. Federal Acquisition Service 26 GSA SmartPay Online Training OCCM offers free online purchase card training for cardholders and A/OPCs :  Cardholders can register, set up a profile, and manage online training courses and certificates  Level 1 A/OPCs can run reports and search for cardholders within agencies https://training.smartpay.gsa.gov

27. Federal Acquisition Service 27 Single Use Accounts Users have access to a virtual account number for use during a specific time period, for a limited dollar amount, and/or for a specific vendor. Benefits for using Single Use Accounts may include:  Accounts can be activated in real time  Disposable, one-time use account numbers may reduce the risk of fraud and abuse  Reduces the need for convenience checks  Increased oversight of spend  Seamless reconciliation

28. Federal Acquisition Service 28 Resources

29. Federal Acquisition Service 29 GSA SmartPay Website and Blog What's New Program Statistics New Legislation State Tax Information Managing Your Program Accepting GSA SmartPay® Cards Online Training for Cardholders and A/OPCs http://smartpay.gsa.gov GSA SmartBlog

30. Federal Acquisition Service 30 General Contact Information GSA Contact Information:  GSA SmartPay Program Support (http://www.smartpay.gsa.gov) Helpline: (703) 605-2808 Bank Contact Information:  Citibank (http://www.cards.citidirect.com/welcome.asp)http://www.cards.citidirect.com/welcome.asp Customer Service: (800) 790-7206  JP Morgan Chase (https://www.paymentnet.com/Login.asp)https://www.paymentnet.com/Login.asp Customer Service: (888) 297-0781  U.S. Bank (https://access.usbank.com/cpsApp1/index.jsp)https://access.usbank.com/cpsApp1/index.jsp Customer Service: (888) 994-6722

31. Federal Acquisition Service 31 Additional GSA SmartPay Courses GSA SmartPay 2 Program Update Conduct Effective Oversight of Your GSA SmartPay Program GSA SmartPay 2 Master Contract Basics GSA SmartPay Saves: Innovative Payment Solutions GSA SmartPay Purchase Management Essentials GSA SmartPay Travel Management Essentials GSA SmartPay Fleet Management Essentials GSA SmartTax: What You Should Know About State Taxes GSA SmartPay Website

32. Federal Acquisition Service 32 Audience Questions

33. Federal Acquisition Service 33 Thank you for your time and attention! Contact Information Camesha Hall camesha.hall@gsa.gov Please provide your feedback and thoughts on our website, available at http://smartpay.gsa.gov/feedback. Don’t forget to visit the GSA SmartBlog at: https://smartpay.gsa.gov/blogs.