Vol 1 - Part 4 - Chapter 4500 GOVERNMENT PURCHASE CARDS The chapter prescribes procedures that apply to all departments and agencies that use the Government purchase card. These procedures include program controls and invoice payment. Section 4510 - Authority Procedures are issued under authorities derived from the United States Code at 31 U.S.C. 3321, 3322, 3327, and 3335, which govern disbursing and payment issuance. Section 4515 - Policy and Use Small purchases of up to $25,000 should be made using the Government purchase card. Other small purchase methods (imprest funds, third party drafts, SF-44 forms, and purchase orders) may only be used in lieu of the Government purchase card when it is more cost-effective, practicable, or required by existing statutes. Section 4520 - Definition of Terms Approving Official - An individual who -- o Reviews cardholder statement(s). o Is responsible for authorizing cardholder purchases (for official use only). o Ensures that statement is reconciled and submitted to the designated billing office in a timely manner. Cardholder - The individual Government employee to whom a Government purchase card is issued. The card bears the employee's name and can be used only by that employee for official purchases, in compliance with the agency's regulations and procedures and General Services Administration's (GSA) Government Commercial Credit Card Services contract. Cardholder Statement - A statement, listing all transactions during the billing period, that is sent to each cardholder. Delegation of Authority - A written delegation issued by responsible agency personnel that establishes authorized cardholder(s), specifying spending and usage limitations unique to that cardholder. Designated Billing Office - The payment office within a Federal agency that receives the "official invoice," which is a consolidated report listing all cardholder charges for the area the office serves. This office is responsible for insuring that payment of the official invoice is made in accordance with Prompt Payment Act deadlines. Designated Billing Office Report - A consolidated report sent to each agency billing office at the end of the monthly billing cycle. The designated Billing Office Report will be the official invoice. Electronic Commerce - The integration of electronic-based systems to support common business processes. For example, the purchase card contractor will provide invoices electronically to Federal agency designated billing offices and accept payments electronically from Federal Government payment centers, and will provide electronic access to account data and reports. Government Purchase Card - Internationally accepted credit card available to all Federal agencies under a single General Services Administration contract for the purpose of making small purchases of up to $25,000, with a minimum of paperwork. These credit card services are available under a contract awarded by GSA for Governmentwide use. Invoice - The report sent to the designated billing office from the contractor for payment of one or more agency cardholder statements. Agencies may elect to receive the invoice electronically. Productivity Based Refunds - Under the present contract, a refund of 0.01% of net sales per billing cycle for payment of the invoice each day earlier than 39 days after receipt. An additional refund of 0.05% of net sales volume is made for electronic report distribution. Small Purchase - An acquisition of supplies, non-personal services, or construction in the amount of $25,000 or less. Vendor Express - A Governmentwide program to process vendor and miscellaneous payments electronically through the Automated Clearing House (ACH) network. The payments are deposited directly to the contractor's account on the payment date. Section 4525 - Agency Procedures Each agency will develop its own internal procedures for using the purchase card. Some processing and internal controls that must be in place prior to using the Government purchase card are as follows: o Designate an office (usually the procurement office) to manage the program. Management of the program includes assurance that training is provided, maintenance of a current list of cardholders and approving officials, and an annual oversight review of the program. o Write a delegation of authority for each cardholder. o Establish approved uses and limitations on the types of purchases and the dollar amounts. o Establish procedures for timely submission of cardholder statements to the agency designated billing office. o Establish procedures for maintaining security of the cards. o Establish procedures for handling disputes and returned, refused, damaged, or unacceptable items and partial deliveries. o Establish card renewal procedures. Section 4530 - Refund of Contractual Costs Agencies will receive productivity-based refunds from the contractor semi-annually, based on the improved invoice payment timeliness. These refunds will be credited to appropriations in accordance with Treasury - GAO Joint Regulation Number 1 and Chapter 7, paragraph 12.2 of GAO's Policy and Procedures Manual for the Guidance of Federal Agencies. Section 4535 - Review and Approval of Billing Statement for Payment When a Government purchase card is used, the vendor providing the good or service to the Federal agency is paid by the contractor that provides the credit card services to the Government. The Government paying agency then reimburses the contractor in accordance with the terms and conditions of the Government commercial credit card services contract and the Prompt Payment Act (I TFM 6-8000). The cardholder and approving official will review the cardholder statement of account received at the end of each monthly billing cycle and follow contract procedures for identifying discrepancies. The cardholder statement must be submitted to the designated billing office within a time frame that allows them to process and pay the consolidated invoice within the Prompt Payment Act deadline. The designated billing office should make adjustments to the consolidated invoice, based on the cardholder statements received. The designated billing office will pay the consolidated invoice in a timely manner even if all cardholder statements are not received (4535.10 - Payments). The contract contains provisions for reconciliation of discrepancies after payment of the invoices, as long as the contractor is notified in writing within the 60 day period prescribed in the contract and VISA regulations. Designated billing offices should use "Vendor Ex- press" as the preferred method for paying the consolidated invoice for credit card services. If payment is made by this method, it must be received by the contractor on the due date. 4535.10 - Payments Payment of the consolidated invoice in a timely manner even if all cardholder statements are not received refers to a payment procedure in which payment is made to a contractor prior to the government's verification that supplies have been received. It does not refer, as provided in the Federal Acquisition Regulations Clause 52.232-25, to payment to a contractor prior to the 30th day after receipt of the invoice. All provisions of the Prompt Payment Act, OMB Circular A-125, apply including interest penalties for late payment. 4535.20 - Training Requirements A training program on the Governmentwide credit card procedures and small purchasing regulations will be established by each participating agency. Cardholders, approving officials, and other employees, such as those in the designating billing office, who are involved in the program must attend agency training. 4535.30 - Safeguarding Credit Cards Agency procedures must address safeguarding credit cards when not in use. Cards shall be safeguarded by agencies in the same manner as cash (I TFM 4-3000 and Manual of Procedures and Instructions for Cashiers). Section 4540 -Electronic Commerce Agencies may receive invoices electronically, make payments electronically, access and review account and master file data, and receive reports electronically. Each department and agency should exercise its authority under the FAR to require that all contractors are paid by EFT, unless a determination is made that it is not in the best interest of the Federal Government to do so. EFT should be adopted as the standard method of payment for all Federal program payments originated by agencies or their agents. CONTACTS Inquiries concerning the contract through which the Governmentwide credit card services are offered should be directed to: General Services Administration, Federal Supply Service (FCXST) Room 603, Crystal Mall #4 Washington, DC 20406 (Telephone 703-305-6658) Inquiries on imprest fund activities should be directed to: Kansas City Regional Financial Center Financial Management Service Department of the Treasury P. O. Box 3329 Kansas City, KS 66103-3329 (Telephone 919-236-3470) All other inquiries should be directed to: Cash Management Policy and Planning Financial Management Service Department of the Treasury Room 521-C 401 14th Street, SW. Washington, DC 20227 (Telephone 202-874-6950)