US Federal Government Card Program

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US Federal Government Card Program

• Spotlight on Accountability

Joshua Frank Account Vice President For US
Department of Defense and Homeland
Security Public Sector Former Military
Intelligence Officer, US ARMY
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Overview

• US Federal Government Program Statistics
• US Office of Management and Budget Purchase Card
  Program
• OMB Circular A-123
• Program Scope
• Overview
• US Department of Defense Initiatives for Better
  Accountability
• Purchase Card Guidebook
• Data Mining and Risk Assessment Tools
• US Federal Government Core Requirements for 2006
  to 2018

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U.S. Federal Government Program Statistics
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US Federal Government Statistics
Total Charge Card Volume Purchase Card
27 Increasebetween 2004 -2006
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US Federal Government - Statistics
Total Number of Transactions Purchase Card
19 Increasebetween 2004 -2006
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US Federal Government - Statistics
Average Transaction Amount Purchase Card
6 Increasebetween 2004 -2006
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US Federal Government - Statistics
Number of Cardholders Purchase Card
3.82 Decreasebetween 2004 -2006
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Office of Management and Budget (OMB) Purchase
Card Improvement
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Feeling Overwhelmed?
Card AdministratorProgram ManagerProcurement
OfficialFinancial Analyst
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Congress Mandates Purchase Card Program Oversight

• Tax Increase Prevention and Reconciliation Act
  of 2005
• Mandatory 3 flat rate on all payments
• Starts January 2011
• Purchase Card Waste Elimination Act of 2006
• Addresses Federal Payment Levy Program (FPLP)
• Requires banks to support tax collection for the
  IRS
• Government Credit Card Abuse Prevention Act of
  2006
• Management of Purchase Cards
• How federal agencies must manage their programs

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OMB Circular A-123 Appendix B
Background

• Fundamental change in the processes and
  technology used in managing card programs is
  needed incremental improvement
  is not the answer.

Key Details

• Mitigate Fraud Internal Misuse
• Monitor Policy Compliance
• Tax Reclamation
• Data Mining
• Risk Management Controls

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OMB Circular A123 Appendix B
Where MasterCard Assists in Management of
Government Card Programs

• Chapter 1 General Information
  ..................................................
  ...............
• Chapter 2 Charge Card Management
  Plan..............................................
  .
• Chapter 3 Training .........................
  ..................................................
  ...........
• Chapter 4 Risk Management
  ..................................................
  ...................
• Chapter 5 Performance Metrics and Data
  Requirements......................
• Chapter 6 Credit Worthiness
  ..................................................
  ..................
• Chapter 7 Refund Management
  ..................................................
  ............
• Chapter 8 Strategic Sourcing
  ..................................................
  ................
• Chapter 9 Requirements for Micro Purchases
  under Section 508 ...
• Chapter 10 Environmental Requirements.........
  .......................................
• Chapter 11 State and Local Tax
  Recovery..........................................
  .......

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OMB Vision for Improvement

The goal of this Circular is to maximize benefits
to the Federal Government when using government
charge cards. The benefits include

• Reducing administrative costs and time for
  purchasing and paying for goods and services
• Using government charge card data to negotiate
  best value prices and to maximize refunds
• Improving financial, administrative, as well as
  other benefits offered by government charge card
  providers and other entities
• Using government charge cards to improve data
  collection to monitor policy compliance, where
  appropriate and feasible and
• Assuring recovery of state and local taxes paid
  on fleet cards.

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OMB Risk Management Mandates

• Review charge card statements and account
  activity reports to identify questionable or
  suspicious transactions
• Review ATM cash withdrawals for reasonableness
  and association with official travel
• Contact employees to inquire about questionable
  or suspicious transactions

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OMB Reporting Requirements

• A description of the method the agency utilizes
  to identify and detect possible card misuse,
  including the use of any specialized information
  technology solutions as well as any requests to
  charge card vendors for data reports
• Agency future plans (within the next 12 months)
  to enhance charge card systems by automating
  reviews to detect instances of abuse, misuse, and
  fraud
• A description of any best practices the agency
  employs in charge card management and
• Any additional useful information regarding
  charge card programs.

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OMB Strategies
Agencies must develop and implement policies and
practices that ensure effective strategic buying.
These policies and practices include

• A thorough spend analysis
• A balanced approach considering socio-economic
  goals and prioritized objectives, if applicable
• Performance measures to assess progress toward
  achieving agency strategic buying goals
  Establishment of key roles and responsibilities,
  including identification of the official
  responsible for achieving agency strategic buying
  goals
• Communication and training strategy and
  Development of internal control mechanisms to
  ensure agency compliance with the requirements of
  this Chapter.

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Department of Defense (DOD)Initiatives for
Better Accountability
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DOD Government Purchase Card Guidebook

• Common Business Rules
• Establishing a Program
• Program Management
• Program Outcomes
• Management Controls
• Personnel
• Roles and Responsibilities
• Knowledge, Skills, and Abilities
• Training
• Investigations of Suspicious Activity
• Special Issues
• Creditworthiness
• Policy and Contract Issues

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Data Mining and Risk Assessment
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Data Mining Tools

• Uses a combination of a discreet DoD tailored
  artificial intelligence back-learning network
  model
• Employs DoD-specific business rules to identify
  highest risk transactions
• Key emphasis on reduction of false positives
• Includes a case management tool to capture and
  maintain all responses to transactions selected
  for review

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Risk Assessment Tools

• Provides a monthly report card on the status of
  the internal controls of the purchase card
  program
• Establishes DoD-wide performance measurements
• Includes flexible reporting criteria needed by
  various organizations to include strategic
  sourcing
• Generates a flexible report card that can be
  tailored by various levels within the organization

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Thank you.