Travel Card Best Practices

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Travel Card Best Practices
Lori Mae L. Tadalan Joline McDonald GSA
SmartPay General Services Administration
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Todays Agenda

• GSA SmartPay Overview
• Travel Charge Card Overview
• Ethical and Appropriate Use
• Creditworthiness
• Delinquency Statistics
• Program Best Practices
• Available Resources
• Questions and Answers

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GSA SmartPay Overview

• GSA SmartPay contracted with five banks to
  provide Purchase, Travel and Fleet Card Services
• Bank of America
• Citibank
• JP Morgan Chase (formerly Bank One)
• Mellon Bank
• U.S. Bank
• (These contracts are collectively known as the
  
• GSA SmartPay Master Contract)
• Five year base period (11/98 11/03) with Five
  One-Year Options Available (11/03 11/08)
• Agencies/Organizations place task order(s) with
  selected bank(s) based on identified needs and
  best value or pool or tag-along with other
  agencies to leverage benefits

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Travel Charge Card Overview
mandatory

• The government travel charge card is
• Use the travel charge card to obtain GSA Airline
  City Pair rates
• The government saves on travel processing and
  revenue generation through volume rebates
• Two account types

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Travel Charge Card Overview

• In FY 2005
• Over 6.5 Billion in Sales
• 43 Million Transactions
• 1.9 Million Cardholders
• Annual sales volume has doubled since FY98 (3.4
  Billion to 6.3 Billion in FY05)

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Ethical and Appropriate Use

• Travel charge cards must be used for official
  government travel

only

• All travel individually billed accounts (IBA)
  must be paid on time by the individual cardholder

• According to the Federal Travel Regulations (FTR)
  Section 301-51.2(m), employees who travel five
  (5) times or less a year are exempt from
  mandatory use

of the government travel charge card
per the discretion of an agency/organizations
policy
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Creditworthiness

• Pursuant to Section 846 of the Consolidated
  Appropriations Act, 2006 (Public Law 109-115),
  your agency is required to assess the
  creditworthiness of first time IBA travel charge
  card applicants
• Refer to the Office of Management and Budget
  (OMB) Circular A-123, Appendix B, Chapter 6,
  Creditworthiness
• For more details, visit http//www.whitehouse.gov/
  omb/financial/fia_travel.htm

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IBA Delinquency (61 days)
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Delinquency Rates

• Corporate Delinquency 2-3
• 2001 Average IBA Delinquency9
• 2002 Average IBA Delinquency7
• 2003 Average IBA Delinquency5.3
• 2004 Average IBA Delinquency4.2
• 2005 Average IBA Delinquency3.4

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Delinquency

• How Does Your Agency Compare?

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Delinquency Statistics

• Outstanding IBA 61 Day Balance May 2006

9,204,967
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Questions For Managing Your Program

• Does your agency have established policies
  regarding program managers and cardholders usage?

• Does your agency have disciplinary policies in
  place?

• What preventative measures are in place to combat
  delinquency?

• Does your agency make the most use of the banks
  electronic reports to help manage cardholders?

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Program Best Practices
For management

• Engage management at the highest levels
• Train agency program coordinators and cardholders
• Set reasonable monthly credit and cash limits
• Lower credit limits
• Block merchant category codes (MCC) not needed
  for travel
• Cancel cards of infrequent travelers
• Implement split disbursement and salary offset
  mandatory under the authority of OMB Circular
  A-123, Appendix B

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Program Best Practices

• Set reasonable spend limits
• Monthly credit and cash limits should correspond
  to historical travel spend patterns and the
  requirements of the job
• Limits may be raised easily to accommodate
  special circumstances (e.g., for frequent
  travelers or extended travel)
• Higher spend limits More risk

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Deactivation

• Deactivate travel charge cards when not in use by
  frequent travelers
• A/OPCs may quickly deactivate/reactivate cards
  electronically or through the bank customer
  service
• Authorizations will be declined at point of
• sale when using deactivation, notify cardholder
  of procedures to re-activate (e.g., who to call,
  when to call)
• Close travel charge card accounts for
  employees/cardholders who leave the agency

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Restrict Use Through MCC Blocks

• The GSA SmartPay Master Contract states that the
  travel charge card shall be used for official
  government travel related expenses
• Block certain merchant category codes (MCC) to
  prevent unauthorized use. Merchants whose
  business is not travel related should be blocked
  to prevent a cardholder from making an
  unauthorized purchase.
• MCC blocks are NOT 100 foolproofwork with
  merchants/contractors to correct inaccurate MCCs

only
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Cardholder Activity Review

• Segregate questionable transactions
• Look for patterns of suspicious behavior
• ATM withdrawals with no other travel-related
  charges in days surrounding withdrawals
• Charges with merchants at locations not
  associated with travel (e.g., transactions at
  local zip codes)
• Declined transactions could indicate misuse

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More Best Practices

• Follow-up with cardholder or supervisor on
  questionable transactions
• Verify whether cardholder was on travel when
  transactions were made
• Escalate or refer to IG, depending on agency
  policy

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Reviewing Reports

• Review questionable transactions through
  Exception Reports
• Review Delinquency Reports
• Pre-suspension
• Suspension
• Pre Cancellation
• Cancellation
• Renewal Reports

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Reports Are Key!

• Transaction detail
• Type of merchant
• ATM withdrawals
• Merchant location
• Date of transaction
• Declined transactions
• Pre-suspension/suspension
• Pre-cancellation/cancellation

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More Reports!

• Declined Transactions
• Disputes
• Unusual Spending Activity
• Lost/Stolen Card
• Master File
• Renewals
• Ad hoc Reports

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Remedial Actions

• Suspension or cancellation of account
• Disciplinary action
• Counseling
• Agency specific reprimand
• Suspension or termination of employment
• Criminal prosecution

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Program Best Practices
For cardholder training

• Address standards of conduct/ethics
• Discuss travel policy (per diem, GSA Airline City
  Pair rates, reimbursement process, documentation
  requirements)
• Clearly state consequences for misuse
• References
• Federal Travel Regulations
• GSA SmartPay Master Contract terms and
  conditions
• Agency policies and procedures
• Bank procedures (e.g., billing)

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Training Goals

• Cardholders and A/OPCs fully understand their
  roles and responsibilities
• Documentation of training is maintained
• Refresher training is provided periodically/annual
  ly
• Training is easily accessible

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Training Resources

• GSA SmartPay Online Training
• Travel cardholder training available online
• Travel A/OPC training available online
• Agency-provided training
• Bank-provided Electronic Access Training (EAS)
• Mini card-sized brochure for cardholders
  providing Helpful Hints for Travel Card Use
• A Guide for Managing Your GSA SmartPay Travel
  Charge Card Program (a new 2006 release)

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Shared Customer Agency Best Practices

• Provide bank cardholder agreement online
• Provide a 15-20 minute face-to-face cardholder
  training
• Provide the GSA SmartPay mini card-sized
  booklet, Helpful Hints for Travel Card Use, with
  each cardholder application
• Provide a reimbursement statement electronically
  to the cardholder to remind the individual to pay
  the bill and that reimbursement from the agency
  has been made

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Benefits To The Program

• Ensure long term program viability
• Reduce administrative burden
• Increase refunds

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Resources

• GSA SmartPay website, http//www.gsa.gov/gsasmart
  pay
• GSA SmartPay Travel Charge Card Cardholder
  Online Training, Charting the Course,
  http//www.gsa.gov/sptraveltraining
• GSA SmartPay Travel Card Program A/OPC Online
  Training, http//www.gsa.gov/aopctraveltraining
• Printed Materials
• A Guide for Managing Your GSA SmartPay Travel
  Charge Card Program (a new 2006 release)
• Mini card-sized brochureHelpful Hints for Travel
  Card Use
• GSA SmartPay Team

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GSA SmartPay Website Information

• GSA SmartPay Master Contract
• Cardholders, Transactions, Sales Volume
  Statistics
• Publications
• Latest Program News and GSA SmartPay Newsletter
  Get Smart
• Frequently Asked Questions (FAQs)

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Questions and Answers
http//www.gsa.gov/gsasmartpay
Joline McDonald [phone] joline.mcdonald_at_gsa
.gov
Lori Mae L. Tadalan [phone] lorimae.tadalan
_at_gsa.gov