U.S. General Services Administration Federal Acquisition Service GSA SmartPay® Saves Innovative...

U.S. General Services Administration

Federal Acquisition Service

GSA SmartPay® SavesInnovative Payment Solutions

Joline McDonaldOffice of Charge Card ManagementGeneral Services Administration

2013 GSA SmartPay Training ForumJuly 29 through July 31


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Legislative and Regulatory Environment


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Government Charge Card Abuse Prevention Act of 2011On October 5, 2012, President Obama signed the Government Charge Card Abuse Prevention Act of 2011 (Public Law 112-194):All executive agencies are required to comply**

Most requirements are addressed in existing OMB Circular A-123, Appendix B guidance

There are additional Inspector General requirements not addressed in the OMB Circular

** The Department of Defense has separate requirements in PL 112-194 for Purchase Card only.


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OMB Memorandum M – 13-21To help agencies comply with P.L. 112-194, the Office of Management and Budget (OMB) released OMB Memo M-13-21, Implementation of Charge Card Abuse and Prevention Act. The memo provides supplemental guidance to the OMB Circular A-123, Appendix B in the following areas:Requires all Federal agencies to establish certain safeguards and internal controls for the Government charge card program

Reports on purchase and integrated card violations, and establishes penalties for violators, including dismissal when circumstances warrant (purchase transactions only)

Increases oversight by requiring that each agency Inspector General (IG) periodically conduct risk assessments and audits to identify fraud and improper use of the Government charge cards


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Treasury Financial Manual UpdateOCCM worked with the Department of the Treasury to update the Purchase Card Guidance, which includes the following updates for agencies:Procedures should encourage the use of cards as a method of contract payment (in accordance with FAR Part 13.301)Review procedures must include data miningTake steps to maximize sales and productivity refundsIncrease the use of strategic sourcing programsReview accounts payable files and analyze spending patterns to find opportunities for savings


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Executive Order 13589Executive Order (EO) 13589 “Promoting Efficient

Spending” was issued November 9, 2011 to reduce government spending. Agencies are directed to: Promote cost cutting and spend reduction policies

Reduce costs by 20% from FY 2010 levels

Reduce printing and encourage use of electronic documentation

Improve agency fleet performance


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Improper Payments Elimination and Recovery Improvement Act of 2012In accordance with the Public Law 112-248, agencies

must take steps to actively mitigate improper payments, fraud, waste, and abuse.

Verify vendors are eligibleto receive governmentpayments (includingcontracts) on Do NotPay list

Next Steps

OCCM is working with OMB and the Department of the Treasury to explore the applicability of the Do Not Pay list to charge card transactions.


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Looking for Potential Savings?


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GSA SmartPay Savings Calculator

OCCM developed the GSA SmartPay Savings Calculator to be an interactive tool for agencies to estimate the impact of transferring spend to GSA SmartPay payment solutions:

The tool is designed to enhance and support leadership payment decision making

Provides estimates for potential savings based on increased utilization

Please note that the tool assumes any generated refunds are provided directly to the agency


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GSA SmartPay Savings Calculator

On the left, enter current spend by program, the average sales refund percentage ,and total contract spend

On the right, enter current grant spend, local travel subsidy, and estimate percentage to be migrated

The Spend Breakdown graph reflects the current total GSA SmartPay spend compared with potential migrated spend

The Refund Breakdown graph reflects the current average sales refund percentage compared with potential refunds based on migrated spend


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Accounts Payable File ReviewThe Accounts Payable File Review (A/P File Review) is a no-cost tool for agencies to help identify opportunities to leverage GSA SmartPay solutions as methods of payment to increase process efficiencies, cost savings, and refunds. Benefits may include:Greater visibility into agency spend and available payment mechanisms

Payment and process efficiencies realized

Opportunities identified for increasing refunds earned


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A/P File Review InputsTo initiate the A/P File Review process, customers agencies must provide GSA SmartPay contract banks with at least one year of accounts payable information. This includes, but may not be limited to the following:Information that includes payment date

Vendor information including name, address, and identification

Cost center and expense codes


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A/P File Review OutputsFollowing A/P File Review analysis of available agency data and information, the GSA SmartPay contract bank will provide the following to the customer agency:Industry best practices and benchmarks

Recommendations for how to close gaps and increase use of GSA SmartPay solutions

A list of key vendors that the agency does business with but do not accept cards

Agency action plan


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Examples of Cost Savings Identified (1) Inconsistent card use at a large government

agency resulted in missed refund opportunities. Agency implemented bank recommendations:Reduced check spend by migration to card spendIncreased spend from approximately $1M to more than $40M in 5 years

(2) State/local government entity had gaps in card use and manual payment mechanisms:Increased card usage by more than 100%Realized more than $1M in cost savings annually


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Innovative SmartPay Solutions


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Innovative Payment Solutions The GSA SmartPay 2 master contract includes traditional magnetic stripe charge card solutions, but also a broad range of innovative carded and non-carded solutions that can improve security, control, and transparency, and increase refunds earned:Innovative Charge Card Products

Cardless Solutions

Secure Chip Cards

Foreign Currency CardsInnovative Charge

Cards

Cardless Solutions

Secure Chip Cards

Foreign Currency Cards


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Stored Value CardsCustomers can use a single value load or card can be reloaded with a specified amount on a recurring basis. Benefits for using Stored Value Cards may include:Immediate fund availability and flexibility

PIN number can be assigned for ATM withdrawals

Enhanced internal controls

No credit check required

Cardholder has online access to review balance and transaction history

Innovative Charge Cards

Cardless Solutions

Secure Chip Cards



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Declining Balance CardsDeclining Balance Cards function similarly to traditional plastic charge cards, however spending limits can be set to not refresh monthly. Benefits may include:Financial flexibility and security

Reduction of administrative fees

Viable option for employees who cannot be issued a charge card

Safe alternative to cash and paper checks Innovative Charge Cards

Cardless Solutions

Secure Chip Cards



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Virtual Cards ( aka Ghost Cards)A virtual account number is assigned to a single vendor, which allows authorized agency personnel to purchase from this vendor without having to use multiple cards or accounts. Benefits may include:Reduces number of open accounts

Allows for multiple users

Allows for a high level of control

Reduces the risk of lost or stolen cards Innovative Charge Cards

Cardless Solutions

Secure Chip Cards



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Single Use Accounts Users have access to a virtual account number for use during a specific time period, for a limited dollar amount, and/or for a specific vendor. Benefits for using Single Use Accounts may include:Accounts can be activated in real timeDisposable, one-time use account numbers may reduce the risk of fraud and abuseReduces the need for convenience checksIncreased oversight of spendSeamless reconciliation


Cardless Solutions

Secure Chip Cards



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Electronic Invoice and Payment Agencies and merchants can manage an entire invoice and payment cycle online, eliminating the need for cumbersome processes associated with paper-based systems. Benefits may include:

Increased visibility and control over invoice tracking

Ability to pay merchants that traditionally do not accept carded payments for high dollar transactionsImproved cash-flow visibility and accelerated payment settlement

Reduces number of late paymentsInnovative Charge Cards

Cardless Solutions

Secure Chip Cards



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Contact and Contactless Chips Charge Cards with security chips can be an effective tool for customers that need enhanced security for transactions. Using cards with imbedded microchips may have the following benefits:Used for highly secure data transmission

Greater worldwide interoperability and enhanced security and protection

Advanced tamper-proof chip technology


Cardless Solutions

Secure Chip Cards



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Foreign Currency Cards This solution is designed for agencies with foreign operations or those that may deploy personnel internationally for extended period as funds spent are billed and paid with local currency.Elimination of foreign currency exchange fees

Availability to issue cards in predefined global locations

Foreign currency cards allow for customer support in the local language


Cardless Solutions

Secure Chip Cards



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Innovative Applications (1) Grants Payment SolutionsOCCM is working with customer agencies to develop and test a GSA SmartPay grants payment solution, which could result in:Increased refunds based on increased volume

Enhanced ability to track grant activity, helping to mitigate fraud, abuse, and erroneous payments

Increased internal controls such as Merchant Category Code (MCC) blocking

Streamlined grants payment processes to reduce administrative processing costs


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Innovative Applications (2)Transit Benefit and Subsidies PaymentBenefits for using a GSA SmartPay solution for transit subsidy payments, such as the Department of Health and Human Services Go!card, could include:Limited to transit provider MCC code onlyAutomated distribution and receipt of benefits through reloadable fare mediaIncreased internal controls and accountabilityAvoids costs as participants only spend what is needed monthly, also use or lose monthly benefit for better spend control


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Innovative Applications (3)Utilities PaymentGSA SmartPay Program solutions may be used for payments to utility companies. For instance, through its Payment Card program, the Department of State pays utility bills with a GSA SmartPay solution. Benefits may include the following:Potential to earn refunds on a recurring expenseIncrease level of data available to help track energy use and expendituresIdentify high energy usage programs and helps facilities and operations identify potential issues


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What Can You Do To Get Started – Finding Potential Savings


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The Purchase Card and the FAR In accordance with the Federal Acquisition Regulation (FAR), agency procedures should not limit the use of the Purchase Card to micro-purchases. Rather, agency procedures should encourage the use of the Purchase Card in greater dollar amounts by contracting officers to place orders and to pay for purchases against contacts under part 8 procedures when authorized, and to place orders and/or make payment under other contractual instruments, when agreed to by the contractor (FAR Part 13.301).

Purchase

Travel

Fleet


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Contract Payments Tools such as an A/P File Review and/or the GSA SmartPay Savings Calculator can help identify areas to migrate spend to maximize cost savings and refunds.Review how your agency pays against existing contracts and spendthrough those contracts

Review your agency’spolicies on paymentsagainst contracts

Purchase

Travel

Fleet

Savings Calculator

Utilize the GSA SmartPay Savings Calculator to determine potential additional refunds earned by moving all or a portion of the payments to a GSA SmartPay solution.


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Federal Strategic Sourcing OMB established the Federal Strategic Sourcing Initiative (FSSI) Governance Council and anticipates that there will be additional strategic sourcing opportunities available in the near future:Review payments made outside of FSSI contracts that could be moved to an FSSI vehicle (could be determined with an A/P File Review)

Determine additional potential savings, refunds, and point of sale discounts that could be received by moving to FSSI vehicles

Utilize FSSI Implementation Kit

Purchase

Travel

Fleet


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Improving Travel Card Use Compliance Improving GSA SmartPay Travel Card use when

employees travel could be an effective way to increase refunds earned and improve enhance internal controls.A/OPCs should develop a plan for enforcing travel card use policies within agencies

What are some of your agency’s best practices?

Purchase

Travel

Fleet


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Innovative Fleet Solutions GSA SmartPay solutions can be designed to streamline Fleet payment processes and enhance data collection. Solutions include but are not limited to:GPS/Telematics: GPS technology used to associate transactions to GPS coordinates for increased transparency to help mitigate fraud and abuse

Fuel Advisors: Designed to help bulk fuel purchasers find best available prices based on unique consumption patterns and low cost sources

Corporate Payment Solutions: Designed to help pay for services outside of traditional fleet transactions, including short term car rentals

Purchase

Travel

Fleet


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Resources


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Available Resources for Innovation There are a number of available resources for agencies to explore increased use of GSA SmartPay solutions to help address agency payment challenges. These include, but are not limited to:“GSA SmartPay Saves” communications campaign and website

Innovative solutions brochures

Contractor banks resources, including brochures and/or classes


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GSA SmartPay Website and Blog

• What's New• Program

Statistics• New Legislation• State Tax

Information• Managing Your

Program

• GSA SmartBlog

• Accepting GSA SmartPay® Cards• Online Training

for Cardholders and A/OPCs

https://smartpay.gsa.gov


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General Contact Information GSA Contact Information:GSA SmartPay Program Support (http://www.smartpay.gsa.gov) Helpline: (703) 605-2808

Bank Contact Information:Citibank (http://www.cards.citidirect.com/welcome.asp) Customer Service: (800) 790-7206

JP Morgan Chase (https://www.paymentnet.com/Login.asp) Customer Service: (888) 297-0781

U.S. Bank (https://access.usbank.com/cpsApp1/index.jsp) Customer Service: (888) 994-6722


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Additional GSA SmartPay Courses GSA SmartPay 2 Program Update

Conduct Effective Oversight of Your GSA SmartPay Program

GSA SmartPay 2 Master Contract Basics

GSA SmartPay Saves: Innovative Payment Solutions

GSA SmartPay Purchase Management Essentials

GSA SmartPay Travel Management Essentials

GSA SmartPay Fleet Management Essentials

GSA SmartTax: What You Should Know About State Taxes

GSA SmartPay Website


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Audience Questions


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Thank you for your time and attention!

Contact InformationJoline McDonald

[email protected]

Please provide your feedback and thoughts on our website, available at http://smartpay.gsa.gov/feedback. Don’t forget to visit the GSA SmartBlog at: https://smartpay.gsa.gov/blogs.

U.S. General Services Administration Federal Acquisition Service GSA SmartPay® Saves Innovative...

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