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U.S. General Services Administration
David J. Shea, CPCM, PMPDirector, Office of Charge Card Management
JP Morgan Chase User Group MeetingSeptember 25, 2014
Federal Acquisition Service
GSA SmartPay® Program Update
Program OverviewToday’s topics include discussions about major GSA SmartPay® Program areas:
Spending
Compliance and Internal Controls
State Tax Compliance Trends
Training
Regulatory Changes
Additional Topics
2
FY 2013 Spend Summary
3
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Purchase Card Spend Trend
4** Government contract spend pulled from USASpending.gov on 4/22/14
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Month Over Month Spend
5
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Octob
er
Novem
ber
Decem
ber
Januar
y
Febru
ary
Mar
chApril
May
June
July
August
Septe
mber
$-
$500,000,000.00
$1,000,000,000.00
$1,500,000,000.00
$2,000,000,000.00
$2,500,000,000.00
$3,000,000,000.00
FY13
FY14
Calendar Month
Pro
gra
m S
pen
d (
in B
illion
s)
Cumulative FY 2014 YTD Spend
6
Program FY13 FY14Fleet $ 1.8 Billion $ 1.8 BillionPurchase $ 13.3 Billion $ 13.3 Billion Travel (CBA) $ 1.5 Billion $ 1.4 BillionTravel (IBA) $ 4.2 Billion $ 4.2 Billion Grand Total $ 20.8 Billion $ 20.7 Billion
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
FY13 FY14 $16,000,000,000
$17,000,000,000
$18,000,000,000
$19,000,000,000
$20,000,000,000
$21,000,000,000
$22,000,000,000
$20,847,473,080.04
$20,689,217,
479.75
Cumulative Program Spend
Fleet Purchase Travel (CBA) Travel (IBA) $-
$2,000,000,000
$4,000,000,000
$6,000,000,000
$8,000,000,000
$10,000,000,000
$12,000,000,000
$14,000,000,000
GSA SmartPay Business Line Spend
FY13FY14
SmartPay Spending TrendsThere are many ways for agencies tomaximize GSA SmartPay Program benefits.
Agencies have the option to engage in a no-cost A/P file review with contractor banks to identify potential opportunities for expanded program use
Savings calculator available at: http://smartpay.gsa.gov/about-gsa-smartpay/program-statistics/savings-calculator
For Travel Cards, comparing voucher amounts to Travel Card transactions may also provide insight into additional compliance opportunities
7
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Spending TrendsMaximizing Program Use
Micro-purchases: Ensure GSA SmartPay solutions are used to the maximum extent for micro-purchases; it is not unusual to see a card-accepting supplier paid many different ways across an organization
Contract Spend: Agencies should find ways to maximize program use, note FAR Part 13.301(b) states that agency procedures should not limit use of the Purchase Card to micro-purchases only
8
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
9
Spending TrendsExploring Further Use of SmartPay Solutions
Evolving Case Study – Utility payments
A/P File Review identified significant spend opportunity
Major challenges exist with both handling paper receivables (invoices) and developing uniform payment strategy for use with ahighly regulated industry
Use of a blended paymentsolution likely
Looking for pilot testopportunities with existing suppliers
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Compliance & Internal Control TrendsThe charge card internal control frameworkcontinues to evolve.
The Government Charge Card Abuse Prevention Act of 2012 (Public Law 112-194)
Office of Management and Budget Memorandum M-13-21, Implementation of the Government Charge Card Abuse Prevention Act of 2012
GSA Smart Bulletin #21
10
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Compliance & Internal Control Trends
11
Vast majority of transactions areappropriate
Recurring oversight themes:
o Compliance with training requirements
o Consistency of management follow through
o Retaining adequate file documentation
o Ensuring property accountability
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Compliance & Internal Control TrendsCapabilities and Reports (1 of 3)
Contractor bank Electronic Access Systems can provide standard reports to help managers detect questionable transactions. These reports include:
Account Activity Report Declined Authorizations Report Disputes Report Unusual Spending Activity Report Lost/Stolen Card Report Master File
12
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
13
MCC Description
5933 Pawn Shops
4829 Wire Transfer Money Order
5094 Precious Stones and Metals, Watches and Jewelry
5681 Furriers and Fur Shops
5813 Bars/Taverns/Lounges/Discos
5921 Pkg Stores/Beer/Wine/Liquor
7273 Dating and Escort Services
7995 Betting/Track/Casino/Lotto
9223 Bail and Bond Payments
Compliance & Internal Control TrendsCapabilities and Reports (2 of 3)
The following is a list of common questionable MCC codes.
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
14
Compliance & Internal Control TrendsCapabilities and Reports (3 of 3)
The following items are required of executive agencies* under P.L. 112-194: IG Report on Audit Recommendation Implementation Statistical Report - See OMB Circular A-123, Appendix B, Chapter 5.3.1 Narrative Report - See OMB Circular A-123, Appendix B, Chapter 5.3.2 IG Risk Assessments Joint Violations Report (Purchase Card only) - Required for agencies with
$10M or more in annual purchase card (integrated—purchase business line only) spend
**The definition of "executive agency" for purposes of the Charge Card Act is found at 41 U.S.C. 133. Section 2 of the Charge Card Act ("Management of Purchase Cards") does not apply to the Department of Defense (DOD). The Charge Card Act amended I 0 U .S.C. 2784, which provides the requirements for purchase card management for DOD. Section 3 of the Charge Card Act ("Management of Travel Cards" ) and Section 4 of the Charge Card Act ("Management of Centrally Billed Accounts") do apply to DOD.
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
State Tax Compliance TrendsOCCM is engaged in a tax recovery pilot.
Tax recovery pilot underway
Retained “share and savings” tax recovery contractor pursuant to IPERIA
Focus is on IBA lodging taxes paid in 11 States which provide exemption, and taxes assessed on CBA accounts
Validating data andsubmitting requests
15
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
State Tax Compliance TrendsPilot Test Lessons Learned
IBA Travel Card tax leakage is minimal
Significant administrative effort required
CBA tax leakage observed to be even smaller than IBA Travel
State laws vary; in some cases, recovery must be sought from vendor as opposed to governmental entities
Pilot results appear to validate original hypothesis
Tax compliance messaging/training for Purchase and Travel cards is key, versus reclamation
16
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Training TrendsMovement into the Virtual
As there are fewer in-person training opportunities, OCCM is transitioning to a training model adopting increased availability of virtual training.
There are currently 4 cardholder and A/OPC training courses available through https://training.smartpay.gsa.gov/
Since October 2012, nearly 300,000 cardholders and A/OPCs have successfully completed training
For the 2014 SmartPay VirtualConference, 3,161participantsregistered with 2,322 attendingresulting in a 73% attendancerate
17
Spending
Compliance & Internal Controls
State Tax Compliance
TrainingRegulatory Changes
Training TrendsCertified Card Manager Training
The Charge Card Manager Certification is available through a combination of a course learning track and management experience. This will help ensure card managers have fundamental training and experience needed to manage a card program.
Curriculum includes six mandatory courses and six electives that can be taken either in-person, virtually, or from the course content store
A/OPCs must have a minimum of six months of contiguous, “hands-on” experience managing a card program
Certified A/OPCs must comply with maintenance training requirements as described in OMB Circular A-123, Appendix B
18
Spending
Compliance & Internal Controls
State Tax Compliance
TrainingRegulatory Changes
19
Regulatory ChangesFAR Case 2013-005
“Terms of Service and Open-ended Indemnification, and Unenforceability of Unauthorized Obligations.”
Interim rule Effective June 21, 2013 Amends FAR parts 12, 13, 32, 43, and 52 Inclusion of an open-ended indemnification clause in a EULA, TOS, or other
agreement is not binding unless expressly authorized by law Deals with potential Anti-Deficiency Act concerns See FAR 13.202 and clause 52.232-39 for more information
Spending
Compliance & Internal Controls
State Tax Compliance
Training
Regulatory Changes
Additional Topics
Treasury Financial Manual UpdateTreasury Financial Management announcement A-2014-04 lowers the maximum dollar amount allowed for intergovernmental Purchase Card transactions (one agency buying from another).
The new policy will be effective June 1, 2015 Limit is lowered from $49,999.99 to $24,999.99 Clarification on split purchases:
o An amount exceeding the maximum dollar amount may not be split into two or more payment transactions in the same day by using one or multiple cards
o An amount owed that exceeds the maximum dollar amount may not be split into two or more transactions over multiple days by using one or more cards
Limit does not affect transactions with commercial vendors
21
22
Status of Chip and PIN (EMV) in the Program EMV cards available from two of the three GSA SmartPay
contractor banks Working to include EMV third contract Industry liability shift for “standard” point-of-sales terminals is
October 2015 Approximately 400 cards already deployed (generally Travel
Cards) At present there is a per card cost to initially issue EMV offers promise of greater security for card-present purchases EMV cards possess both chip and mag stripe: industry capability
to process EMV uncertain
Data Warehouse UpdateOCCM continues to develop the GSA SmartPay Data Warehouse to provide a government-wide view of charge card spend and data.
Currently operating under initial operating capacity; OCCM to develop enhanced dashboards and reports
Raw data reports can be generated and exported to common formats quickly
Capabilities will support executive and other data requests The Data Warehouse is not intended to replace bank electronic
access systems OCCM is in the process of providing Data Warehouse access to a
limited number of agencies
23
24
Charge Card Performance Measures (1 of 2)OCCM briefed draft GSA SmartPay Program-wide metrics to the Data Management Working Group on July 10, 2014.
25
Charge Card Performance Measures (2 of 2)
Audience Questions
Thank you for your time and attention!
Contact InformationDavid J. Shea, CPCM, PMP
[email protected](703) 605-2867
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.
