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How agencies should prepare for charge card law

Feb. 3, 2013 - 11:26AM   |  
By EVA ROBINSON   |   Comments

With Congress continually trying to find ways for the federal government to save money and operate more efficiently, attention has recently turned to agencies’ accountability and best practices.

This focus is, to a large extent, embodied in the 2012 Government Charge Card Abuse Prevention Act, sponsored by Sen. Chuck Grassley, R-Iowa, and signed into law by President Obama in October. The law is scheduled to go into effect in March.

The law follows best practices of corporate employee charge card programs and establishes stronger monitoring of travel and charge cards issued to federal employees. The law also introduces and mandates greater internal controls, rules of eligibility for travel cards and specific penalties for abuse or inappropriate activity.

A properly managed charge card program can help protect government agencies and reduce costs by providing real-time data and easy-to-use reporting tools already being used in the private sector.

Here are five approaches government agencies should consider to improve internal oversight, controls and security of their charge card programs. These approaches may have the added benefit of enabling agencies to be better prepared to comply with the law:

• Integrate all financial and enterprise resource planning systems to allow for direct data access (system-to-system communications for real-time updates) and eliminate redundancies and confusion among multiple systems.

• Use a card program platform (usually available through the bank that provides the card program) that provides efficient and immediate access to employee charge card transaction viewing, powerful cost allocation capabilities and real-time updates.

• Simplify account data management by requiring changes to be made online through an account management tool. These tools can provide the agency with the ability to manage card terminations and regular account maintenance and to establish spending limits that allow for greater control and instant results. The ability to make changes should also be available through an automated batch process or a real-time XML web service.

• Use electronic reporting for the Historically Underutilized Business program, IRS Form 1099-MISC compliance, invoicing, ability to monitor transaction data for vendor strategic sourcing negotiations, policy adherence monitoring, cost control monitoring and travel expense reporting online 24/7.

• Improve control and management through state-of-the-art misuse and abuse detection data-mining tools and automated transaction logs that establish audit trails to let agencies quickly and efficiently monitor and detect potential fraud, waste and abuse.

There are already common-sense practices to help agencies better manage their card programs. Nearly 15 years ago, the General Services Administration implemented its SmartPay program, allowing agencies to more efficiently and easily obtain purchase, travel, fleet and integrated charge card services.

In many cases, the use of virtual card payment tools — charge card payments made in an automated fashion via one-time-use card account numbers — is more efficient and more secure than using an employee charge card to pay for business-related transactions.

As agencies prepare to comply with the Government Charge Card Abuse Prevention Act, there is no better time than now to fully assess card program operations and make needed changes. Short-term changes can result in long-term efficiency benefits and cost savings in an era of greater scrutiny and fiscal austerity.


Eva Robinson is general manager of GSA/Federal Card Market for J.P. Morgan’s Global Commercial Card division. J.P. Morgan has been a GSA SmartPay card provider since the program began in 1998.

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