GSA SmartPay2 Purchase Card Basics

1. GSA SmartPay2 Purchase Card Basics Roberto Devarie Milton Vazquez Office of Charge Card Management (OCCM) 12th Annual GSA SmartPay Training Conference August 10 – 12, 2010

2. Value to the Customer • Learn about the GSA SmartPay2 Purchase Card • Understand specific roles and responsibilities • Discover and share leading practices of purchase card program management • Find out about general resources (e.g., training, reporting, contact information)

3. Agenda • GSA SmartPay2 Purchase Card Overview • Purchase Card Roles and Responsibilities • Purchase Card Leading Practices • General Resources • Questions

4. Polling the Audience • How many audience members are: A. Level 1 A/OPCs B. Level 2 A/OPCs C. Level 3 A/OPCs D. Unsure • How many audience members are new to the GSA SmartPay Training Conference this year? A. Yes, this is my first year B. No, I have attended the GSA SmartPay Training Conference before ?

5. GSA SmartPay2 Program Overview DID YOU KNOW… $943 was spent using Federal charge cards every second in FY09 • Enables over 350 Federal agencies/organizations to obtain charge card products and services through master contracts thatGSA established with three banks: Citibank, JPMorgan Chase, and U.S. Bank • Agencies/organizations issued task orders against these master contracts to obtain charge card products and services • Agencies/organizations pay no direct fees to use the program • Period of performance for existing contracts is through 2018

6. GSA SmartPay2 Purchase Card Program Benefits • Safety – improves financial controls and eliminates the need for cash • Electronic Access to Data – contractor banks' Electronic Access Systems (EAS) provide agencies/organizations with accurate, comprehensive transaction detail with a few clicks of a button • Refunds – provides refunds to agencies/organizations based upon dollar volume of transactions; In fiscal year 2009, refunds totaled over $255 million program-wide • Administrative Savings – provides significant administrative cost avoidance and efficiency; In fiscal year 2009, agencies/organizations avoided $1.5 billion in administrative processing costs using the GSA SmartPay purchase card* * Source: Palmer, R., & Gupt, M. (2007). The 2005 Purchasing Card Benchmark Survey Results

7. Polling the Audience • What was the amount of total spend for the purchase card in FY09? A. $30 billion B. $19 billion C. $9 billion D. $15 billion ? ANSWER: B. $19 billion! Total purchase card spend amounted for 65% of overall program spend in FY09.

8. GSA SmartPay Purchase Card – By the Numbers *Includes Prime Vendor program

9. Purchase Card Overview

10. Polling the Audience • What are some uses of the GSA SmartPay Purchase Card? A. Supplies B. Services C. Travel-related expenses D. A (Supplies) and B (Services) E. All of the Above ? ANSWER: D. Supplies and Services, and more! In accordance with the Federal Acquisition Regulation (FAR) the GSA SmartPay2 Purchase card is used for making official government purchases for supplies, goods, and services under the micro-purchase threshold of $3,000.

11. GSA SmartPay Purchase Charge Card • The GSA SmartPay Purchase Charge Card provides cards to federal employees to make official government purchases for supplies, goods, and services under the micro-purchase threshold of $3,000 per Federal Acquisition Regulation (FAR) • The purchase charge card is both a procurement and payment mechanism for micro-purchases • For purchases above the micro-purchase threshold, the purchase card may be used as an ordering and payment mechanism, but not a contracting mechanism • The following items may not be purchased with the purchase card, as per the GSA SmartPay2 Master Contract: • Long-term rental or leasing of land or buildings • Travel or travel-related expenses • Cash advances

12. GSA SmartPay Purchase Charge Card (cont’d) • All purchase card accounts are Centrally Billed Accounts (CBA), and the liability for transactions made by authorized cardholders is borne by the government • The government is not liable for transactions on the card when the use of the card is by a person who does not have actual, implied, or apparent authority for such use • If the card is used by an authorized cardholder to make an unauthorized purchase, the agency/organization is responsible for taking appropriate action against the cardholder such as: • Counseling • Cancellation of Purchase Card • Notation in employee performance evaluation • Suspension and or termination of employment

13. Polling the Audience • What is the micro-purchase threshold for contingency operations within the U.S? A. $3,000 B. $10,000 C. $15,000 D. There is no micro-purchase threshold for contingency operations ? ANSWER: C. $15,000. In accordance with the Federal Acquisition Regulation (FAR) the GSA SmartPay2 Purchase card is used for making official government purchases for contingency operations within the U.S. under a micro-purchase threshold of $15,000.

14. Understanding the “Micro-purchase” threshold • “Micro-purchase” means an acquisition of supplies, goods or services in which the amount does not exceed $3,000 (source: FAR 13.2) • The limit is $2,000 in the case of construction • The limit is $15,000 in the case of contingency operations inside the U.S. • The limit is $25,000 in the case of contingency operations outside the U.S. • Cardholders cannot split purchases in order to stay below the authorized spend limit • For purchases above the micro-purchase threshold, the purchase card may be used as an ordering and payment mechanism, not a contracting mechanism

15. Purchase Card Roles & Responsibilities

16. GSA SmartPay2 Program Stakeholders Office of Management and Budget (OMB) Perform oversight of the government-wide charge card program Agencies/ Organizations Use charge card products and services to support their missions and operations Office of Charge Card Management (OCCM) Provides overall program management and advocacy MasterCard/ VISA Provides the transaction network for GSA SmartPay2 charge cards Banks Provide charge card products and services through GSA SmartPay2 Master Contracts; partner with MasterCard/VISA to issue cards

17. GetSmart quarterly newsletters • Monthly meetings • Agency POCs • Strong web presence • Ad hoc working groups • Customer satisfaction surveys • Social Networking exploration Office of Charge Card Management Responsibilities • Provide a comprehensive and flexible master contract • Offer strong customer orientation and frequent customer contact/support through: • Test and share best practices • Engage in continuous market research and regular meetings with industry • Deliver “Beyond Plastics” strategy and conferences • Provide balanced customer advocacy and program leadership • Training workshops, guides and GSA SmartPay Annual Training Conference

18. Polling the Audience • True or False: A/OPCs are required to maintain an up-to-date list of account names, account numbers, addresses, e-mail addresses, telephone numbers, etc., of all current cardholders and accounts • True • False ? ANSWER: A. TRUE. As outlined in the master contract, A/OPCs are required to maintain this information for all current cardholders and accounts. One of the keys to an effective charge card programs is maintaining the most current and up-to-date information.

19. Roles & Responsibilities of A/OPCs • Serve as the liaison between agency/organization management, GSA SmartPay2 contractor banks, purchase cardholder, and the Office of Charge Card Management (OCCM) • Manage agency/organization purchase card program, in support of agency/ organization mission and operations • Promote appropriate use of purchase card • Take appropriate action regarding charge card fraud, misuse or abuse • Resolve technical and operational problems between GSA SmartPay2 contracting bank and the cardholders as required • Develop agency/organization-specific policies and procedures as necessary • Keep lines of communication open with all key program participants Note: A/OPC responsibilities may vary among agencies/organizations

20. Polling the Audience • True or False: Cardholders have their own responsibilities for managing their GSA SmartPay2 charge card(s) appropriately. • True • False ? ANSWER: A. TRUE. As outlined in the Master Contract, cardholders are required to follow specific rules and responsibilities, a number of which are defined in GSA SmartPay cardholder training and agency/ organization specific training.

21. Roles & Responsibilities of Cardholders • Use the charge card appropriately for authorized purchases, in accordance with agency/organization policy, laws, and governmental regulations • Keep up-to-date with required program and agency/organization specific training, including refresher training • Be aware of communications from A/OPCs and take appropriate action • Understand preventative measures to avoid fraud and misuse • Understand GSA SmartPay Charge Card liabilities • Shop and purchase smarter • Use GSA Advantage!® to conduct quick and easy market research and to order already negotiated low-price items • Take advantage of the Blanket Purchase Agreements (BPAs) your agency has negotiated to get better prices • Always ask for discounts at the register - whether or not point-of-sale discounts are given • Buy green products in support of The President’s green purchasing program

22. Do’s Keep the card in a secure and safe place Maintain a log of all your purchases Use the purchase card only to make informed buys of approved goods and services Observe all dollar limits on purchases Reconcile all transactions Resolve disputes in a timely manner Use the card ethically Immediately report a lost or stolen card to you’re A/OPC and card issuer Destroy any lost or stolen cards that are recovered Be aware of identity theft schemes attempting to gain access to financial information Return your purchase card to you’re a/OPC if you leave your agency/organization or retire Responsibilities for using the Purchase Card (cont’d) Don’ts • Use the purchase card to purchase long-term rentals, travel or travel-related expenses, cash advances, personal items, or items that exceed the government’s actual need • Allow others to use your card (it is assigned to you and is your responsibility) • Split purchases in order to stay below your authorized spend limit A full list of Purchase Card Do’s and Don’ts can be found in the “Helpful Hints for Purchase Card Use” brochure

23. Roles & Responsibilities of Approving Officials (AO) • Review and approve all purchases made on the Fleet Card and ensure that they are appropriate and necessary for accomplishing the agency’s/organization’s mission • Resolve all questionable charges • Certify the monthly invoice resulting from the purchases of the cardholders within his/her account structure • Verify receipt of the purchase/transaction • Serve as the front lines of defense against misuse/abuse and fraud

24. Roles & Responsibilities of Banks • Allow the AO or A/OPC 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 • Provide sales and productivity refunds • Citibank: http://www.cards.citidirect.com/welcome.asp 1-800-790-7206 (customer service) • JPMorgan Chase: https://www.paymentnet.com/Login.asp 1-888-297-0781 (customer service) • U.S. Bank: https://access.usbank.com/cpsApp1/index.jsp 1-888-994-6722 (customer service)

25. General Purchase Card Management

26. Poll the Audience • Are the purchasing procedures with the GSA SmartPay Purchase Card clearly defined at your agency/organization? A. Yes B. No • Do you run ad hoc reports for your GSA SmartPay Purchase Card program? A. Yes B. No • Do you know how to set authorization controls on the GSA SmartPay Purchase Card? A. Yes B. No ?

27. Leading Practices: Purchase Card Management Establish Internal Policies • Agencies/organizations should define a list of A/OPC duties and responsibilities in their written policy and A/OPC training material to ensure that all parties understand their role • A/OPCs should establish clear policiesfor their agency/organization for purchase cardholders by: • Setting authorization controls on purchase cards – dollars per transaction limit, transactions per day limit, Merchant Category Codes (MCCs), etc. • Outlining eligibility for using the purchase card • Designating who should have authority to make changes to accounts • A/OPCs and cardholders should review Office of Management and Budget (OMB) Circular A-123, Appendix B “Best Practices” • Responsibilities of cardholders, AOs, and A/OPCs should not overlap to ensure that management controls are not circumvented

28. Leading Practices: Purchase Card ManagementEstablish Internal Procedures • A/OPCs should establish clear procedures by explicitly outlining the following: • How to determine if unauthorized users have access to cards • How to obtain, change, and close an account • Reconciliation process • How to perform an annual review of all issued cards • Audit process and frequency • Authorization controls • Process for identifying an alternate point of contact to receive and accept Purchase Card related material • Cardholders should be aware of agency/organization procedures

29. Leading Practices: Preventing Misuse/Abuse & Fraud • Establish agency/organization policies and procedures to prevent misuse • Address standards of conduct/ethics and clearly state consequences for misuse • Set reasonable charge and transaction amount limits • Restrict spend use through Merchant Category Code (MCC) Blocks • Deactivate cards as appropriate – cards with little or no activity should be considered for cancellation • Manage delinquency • Implement proper training • Review card activity through reports generated from bank Electronic Access Systems DID YOU KNOW… Misuse by employees impacts the performance of agency/organization program and refund earnings potential More information on this topic will be provided during the “Conduct Effective Oversight of Your GSA SmartPay Program” (Session 7, Wednesday 12:30pm, GA Ballroom and Session 14, Thursday 3:30pm, GA Ballroom

30. Polling the Audience • Have you identified cases of misuse/abuse and/or fraud with the Purchase Card in your agency/organization? A. Yes B. No ? • Please share with us how you have addressed the situation • Report any suspected fraud to your contracting bank or agency’s/organization’s Inspector General Office • Contact your GSA SmartPay2 contracting bank to see what tools and resources they provide for eliminating misuse/abuse and fraud • Many agencies/organizations provide a fraud hotline number for reporting misuse/abuse and fraud

31. Leading Practices: Deactivation • Deactivate purchase cards when not in frequent use by cardholders • A/OPCs may quickly deactivate/reactivate cards electronically or through the bank’s customer service • If a card is deactivated, authorizations will be declined at the point of sale • Notify cardholder of deactivation, and communicate procedures to re-activate (e.g., who to call, when to call) • Be wary of automatic billing (e.g. magazine subscriptions) and forced transactions (e.g. vendor manually charges card) • Close purchase charge card accounts for employees/cardholders who leave the agency

32. Leading Practices: Reporting GSA SmartPay2 contractor banks are required to issue a set of reports to A/OPCs (determined by the agency/organization) that cover topics such as transactions, payments, disputes, delinquencies • A/OPCs should: • Monitor reports regularly • Use reports proactively, not reactively • Understand and familiarize yourself with all available reports • Develop ad hoc reports • Save reports in a shared folder so all A/OPCs can access them • Benefits of Reports: • Allow A/OPCs to oversee their GSA SmartPay Purchase Card program’s overall financial condition • Monitor for potential misuse/abuse and fraud • Provide invoice and payment data • Supply necessary data to fulfill OMB requirements

33. Using Reporting Tools for Cardholder Activity Review • Account Activity Report • Declined Authorizations Report • Dispute Report • Unusual Spending Activity Report • Master File • Ad Hoc Report A full listing of agency reports can be found in section C.3.3.1 of the GSA SmartPay2 Master Contract

34. Leading Practices: Training • Ensure cardholders and A/OPCs fulfill the required refresher training requirements at a minimum every three years, or more frequently per agency/organization policy; purchase-specific GSA SmartPay online training: • Cardholders:http://fss.gsa.gov/webtraining/trainingdocs/smartpaytraining/index.efm • A/OPCs:http://apps.fss.gsa.gov/webtraining/trainingdocs/aopctraining/index.cfm • Provide a comprehensive face-to-face training as orientation for new cardholders • Engage in bank-provided training • Attend other courses offered at the Annual GSA SmartPay Training Conference • Attend GSA SmartPay Courses offered at GSA Expo • Ensure that training is easily accessible • Address standards of conduct/ethics and clearly state consequences for misuse

35. General Resources

36. General Resources • GSA SmartPay website: www.gsa.gov/gsasmartpay • Office of Management and Budget (OMB) Circular A-123 Appendix B • Establishes standard minimum requirements and best practices for improving the management of government charge card programs • For more information, visit: www.whitehouse.gov/omb/circulars/a123/a123_appendix_b.pdf • Federal Acquisition Regulations (FAR) • Agency/Organization specific policies and established procedures • For more information, visit: www.acquisition.gov/far/ • Information using your purchase card to buy “green” products available on the Office of the Federal Environmental Executive website: http://ofee.gov/gp/gp.asp • Guides and brochures available online, and hard copies may be ordered by visiting the http://apps.fss.gsa.gov/cmls • Blueprint for Success: A Guide for Purchase Card Oversight • Mini card-sized brochure – “Helpful Hints for Purchase Card Use”

37. Other GSA SmartPay Courses being offered • GSA SmartPay2 Fleet Card Basics • GSA SmartPay2 Travel Card Basics • GSA SmartPay2 Master Contract Basics • GSA SmartPay Program Update • GSA SmartPay in More than One Flavor: Innovative Products & Services • Conduct Effective Oversight of Your GSA SmartPay Program • Basic Charge Card Payment Reconciliation • Navigating the GSA SmartPay Website

38. Questions Please provide your feedback and thoughts about the current and future program at: www.gsa.gov/gsasmartpay under “GSA SmartPay Program Feedback Form” Contact Us Roberto Devarie, roberto.devarie@gsa.gov, (571) 289-6110 Milton Vazquez, milton.vazquez@gsa.gov, (703) 605-9475 GSA SmartPay Program Support Phone: (703) 605-2808 E-mail: gsa_smartpay@gsa.gov www.gsa.gov/gsasmartpay

39. Thank you!