Date of Report: June 25, 1996 Location: NASA Headquarters Case Number: G-96-008
Representative William F. Clinger, Jr., Chairman, House Committee on Government Reform and Oversight, sent a letter to several agencies on February 6, 1996, requesting information on employees' use of American Express Government Travel cards. The interagency Chief Financial Officers (CFO) Council met on February 22, 1996, to discuss the inquiries and propose a coordinated approach for agencies to use in responding to this request. The NASA Office of Inspector General (OIG) initiated a review of the program on March 1, 1996.
1.1 Purpose: The purpose of this inspection was to assess NASA American Express (AMEX) cardholders' adherence to the terms of their agreement with the American Express Government Travel Program and to evaluate the adequacy of management systems and controls.
1.2 Scope: More than 12,500 NASA employees participate in the American Express Government Travel Program. These employees sign an agreement to use the charge card only for official travel and travel-related expenses and to pay all charges upon receipt of the bill. Many employees also use the card to withdraw travel cash advances from automated teller machines (ATM). This study focused on three primary areas: (1) employees' payment records; (2) appropriate use of card by employees ; and (3) adequacy of current travel card management systems and controls.
1.3 Methodology: We conducted personal interviews with the Agency Program Coordinator (APC) and the American Express (AMEX) Government Account Manager, and conducted telephone interviews with personnel from the Headquarters offices of Logistics and the Chief Financial Officer, and with seven Center program coordinators.
The American Express Government Travel Program contract is administered by the General Services Administration (GSA). The contract, GS-OOF-34139, was awarded to American Express Travel Related Services Co., Inc. on September 30, 1993, and is effective from November 30, 1993, through November 29, 1994, with four one-year options subject to renewal by GSA. The contract provides a travel and transportation payment and expense control system for the official travel expenses of participating agencies. This system consists of individually billed employee accounts, centrally billed accounts, ATM access, and travelers checks. Employees are expected to use their cards only for official travel expenses and to pay their bills upon receipt; there is no interest charged for late payment.
3.1 NASA employees generally adhere to the terms of the American Express Government Travel Program. However, there are 40 employees with accumulated unpaid debts of almost $60,000 who have sustained no administrative penalty.
3.2 The NASA infrastructure for local operations of the AMEX travel program is sound. We recommend strengthened central management and oversight providing pro-active leadership and policy guidance.
4.1 NASA employees generally adhere to the terms of the American Express Government Travel Program. However, there are 40 employees with accumulated unpaid debts of almost $60,000 who have sustained no administrative penalty.
Payment. There are currently more than 12,500 individual NASA cardholders participating in the American Express Government Travel Program. The agreement signed by each employee states that all charges are due upon receipt of the monthly billing statement. When any undisputed amounts are first included within an unpaid "previous balance" on a statement, they are considered delinquent. American Express, however, considers payment within this period to be reasonable and takes no action. When an unpaid balance is listed a second time as a previous balance (i.e. after 60 days), it is considered "seriously delinquent" and may result in suspension of card privileges. With the consent of the Agency, AMEX may cancel the account if the undisputed amount is not paid in full within 120 days of the date of the first billing statement on which the charge appears. Enclosure B in the written report shows NASA's combined payment performance from June, 1995 through March, 1996. For that period, during which more than $17,000,000 was charged, NASA's performance was considered excellent by both AMEX and the General Services Administration (GSA) with 92% of the employees current. NASA's on time payment status surpassed the Government-wide on-time payment status each month during the period. Although December, January, and February fell somewhat below other months, NASA remained above Government- wide averages. AMEX officials stated that payment performance generally falls off during the Christmas holiday period, but indicated that 1995 was worse than usual. The partial Government shutdown during December 1995, and January 1996, is the most likely reason for the dropoff during those months. We cannot compare prior years as AMEX records go no further back than June 1995. Agency AMEX program managers, Center coordinators, and cardholders deserve praise for NASA's excellent payment record. Johnson Space Center (JSC) and Langley Research Center (LaRC) deserve special mention for both very high dollar volume and a 93% average in the combined current and 30-day categories during the 11-month period.
In addition to individual card holders, NASA also maintains AMEX Government Travel Accounts (GTA's) at most Centers. GTA's are cardless central billing accounts designed to support airline and rail transactions. The payment record on these accounts generally parallels that of individual card holders.
Unauthorized Use. Data on misuse of the travel card are not as conclusive or as precise as that for bill payment. This is partly due to the fact that AMEX, a receivables driven organization, keeps no records of cancellations due exclusively to misuse. CPC's report relatively few, easily detectable instances of unauthorized use, most of which are corrected when the employee is contacted. The effectiveness of a block put on retail purchases in May 1995, is unknown, with several CPC's unsure of the applicability, conditions, and efficacy of the block.
Action to stop misuse of the travel card is more aggressively pursued by CPC's than is payment delinquency. Some CPC's and many managers regard payment as largely a matter between the employee and AMEX, but regard personal use a more serious violation of regulations. AMEX, on the other hand, is more concerned with promptness of payment, though it provides useful tools such as a wide choice of retail blocks and a variety of customized reports to help agencies prevent and detect misuse.
Delinquency. While NASA, as a whole, has a good record of compliance with requirements, 40 employees have had their cards cancelled within the last 30 months for cumulative unpaid debts of almost $60,000. If the cards were, as required, used only for official travel, each of these employees, ranging from a student trainee to several GS-15's, was reimbursed by the agency. In spite of this, the only known AMEX related disciplinary action over this time period was a written reprimand for repeated card misuse to a person who was not among the 40 cancelled cardholders. Of the 28 current employees with cancelled cards, 12 are at grades 13-15 and may still be traveling.
Executive Order 12674 (modified by Executive Order 12731) Principles of Ethical Conduct for Government Officers and Employees and The Standards of Ethical Conduct for Employees of the Executive Branch, 5 CFR 2635, requires that Federal employees satisfy their "just financial obligations". The current published guidance on employee discipline, NASA Supplement S-751, cites four offenses that can be applied to AMEX card delinquency and misuse and lists penalties ranging from written reprimand for first offense to suspension and removal for repeated offenses.
Regular periodic reminders to employees and supervisors about travel card policy is done at only half the NASA Centers. We recommend that reminders of policies and responsibilities be included in the annual mandatory ethics briefings and in supervisory training courses. Periodic inclusion in newsletters and other published material would also reinforce policy.
4.2 The NASA infrastructure for local operations of the AMEX travel program is sound. We recommend strengthened central management and oversight providing pro-active leadership and policy guidance.
NASA Organization. Agencywide program policy and management responsibility currently rests with the APC, who reports to the Director, Logistics Management Office, Security, Logistics, and Industrial Relations Division, Office of Management Systems and Facilities (Code J). The APC works closely with the Functional Evaluations and Operations Support Branch, Financial Management Division, Office of the Chief Financial Officer (Code B). Local program operations are carried out by CPC's and alternates at each installation; all but two of whom are in financial management positions (Headquarters and Kennedy Space Center). The Agency is served by an AMEX government account manager who interfaces primarily with the APC, but has also visited several Centers and is available to answer questions from the CPC's.
AMEX Support. The AMEX government account manager is knowledgeable, well organized, and extremely responsive. He provides prompt customer service and resources and makes himself available to conduct briefings and training or to attend any meeting where his presence might be helpful. Materials from AMEX are comprehensive and easy to use and understand.
Operations. The APC and the CPC's are provided with the AMEX Government Program Reference Manual which details all of the policies, services and resources provided under the GSA Contract. They also have access to a wide variety of comprehensive and, upon request, customized reports from AMEX. CPC's monitor the appropriate use of the card and of the payment activity of cardholders through review of monthly reports prepared by AMEX. The reports reviewed each month by virtually all CPC's include: (1) the Monthly Activity Report which reports all charge activity by cardholder; (2) the Aging Analysis Report which shows the payment status of each cardholder; (3) the Monthly Suspension; and (4) the Monthly Cancellation report.
The Aging Analysis Report is used to evaluate payment promptness. It provides each cardholder's current balance by aging category (i.e., 30, 60, 90, 120 days) as well as a 12- month aging history. It quickly gives the CPC data on which to base preventive or corrective action.
The Monthly Activity Report which details all charges made by each active cardholder, is most often relied upon to review inappropriate use of the card. CPC's can easily detect questionable charges by location and type of establishment and by the entry's isolation from other charges which would occur naturally while traveling. The monthly report includes ATM withdrawals by date and location.
Strengthened Management and Oversight. Conversations with CPC's and analyses of their completed questionnaires and work samples reveal that many have implemented excellent ideas and developed quality products for local use. Headquarters, for example, has developed a succinct and easily understood orientation letter that summarizes program processes and requirements; Johnson Space Center's Financial Management Division has published a travel handbook which clearly and simply explains all travel policies to cardholders; Goddard Space Flight Center has developed a useful outline on travel regulations. Other Centers have developed letters calling attention to payment delays to send to employees and supervisors. Stennis Space Center (SSC), for example, has developed excellent models of these types of letters. The managers and CPC's group has never had an all-hands meeting, video conference or telephone conference to share these and other ideas or to voice questions and concerns. An electronic mailing list is maintained, but is used primarily for two - person dialogue and Headquarters-to-field notification of AMEX changes or new requirements. We recommend that periodic video or telephone conferences be scheduled to communicate good ideas and to work together to solve common problems. The AMEX account manager has visited several Centers and has expressed an enthusiastic willingness to address the group as a whole to exchange ideas and to communicate his perspective of CPC responsibilities.
The questionnaires completed by each CPC reveal a wide variety of processes and approaches to policy orientation and reinforcement, card eligibility requirements, amelioration of payment delinquency and unauthorized use, and management involvement. For delinquency issues, some CPC's contact employees, a few contact supervisors (one on first offense, another on second). Some make the contact by phone, others by electronic mail, some by memorandum. Some make the contact themselves, others involve the Financial Management Office or the Chief Counsel; still others let the status of the cardholder determine the level of the person making the contact. Some take a very pro-active role, counseling employees immediately upon receiving a 60-day delinquency report; others adopt a more passive role, warning employees only about impending suspensions or cancellations. One Center (Ames Research Center) stated that loss of staff will force them to stop contacting employees in any way, leaving the matter to be resolved between the employee and AMEX. Unauthorized use of the card usually stimulates a swifter and more structured approach by CPC's. Employees are generally warned immediately, often by memorandum, that continued unauthorized use will result in cancellation.
We recommend that specific guidance be developed and communicated to CPC's for both payment delinquency and unauthorized use of the charge card. Such guidance will not only assist CPC's in taking appropriate and progressive actions, it will ensure consistent and, therefore, fair treatment of employees. Guidance should be followed up by evaluation of implemented changes and assessment of effectiveness.
NASA should consider centralizing management responsibility in the Office of the Chief Financial Officer (Code B) either at Headquarters or at a lead Center. The primary management and operational concerns of the AMEX program are related to travel and finance. The recent, well received, Headquarters Automated Teller Machine Cash Advance Policies and Procedures,document was written by Code B personnel. Further, as noted above, all but two of the CPC's are located in financial organizations, several with travel program authority. Those knowledgeable of travel regulations and with easy access to travel information are able to investigate or expedite reimbursement to facilitate charge bill payments. Also, Code B personnel are in the best position to analyze opportunities for increasing efficiency in the entire travel process. An example of this is the consideration, currently on hold, of implementing a process whereby employees can authorize direct payment to AMEX on their travel vouchers. Finally, the Government-wide program and contract with AMEX is managed by the CFO at GSA. He chairs the interagency group of CFO's, the CFO Council. Concerns of the Council include the AMEX program.
NASA has been deservedly praised by both AMEX and GSA for its excellent record. The suggestions in this report are intended to enhance that record. The Office of Inspector General will work cooperatively with appropriate organizations on followup activity.