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Travel Card Policy

CFO Policy 06-03: Travel Card Management

Background

Government Contractor-Issued Travel Charge Card (travel card) delinquencies and misuse continues to be a high profile issue across the Federal government. The Department of Transportation (DOT) is the fourth largest issuer of travel cards in government but has also consistently ranked among the worst offenders among civilian agencies. While we have made some positive progress over the past two years in addressing this problem, the outcomes are not yet at a level that reflects favorably on the Department.

Employees who do not responsibly manage their accounts or otherwise violate the terms of the Cardholder Agreement may have their card privileges suspended and/or cancelled by either the contractor or the Operating Administration (OA). When these employees are consequently unable to perform job-related travel, their ability to perform is diminished. These individuals also reflect unfavorably on the Department as monthly delinquency statistics are published across the Federal Government by GSA. Since high rates of delinquency also reduce the amount of rebates earned by each OA, these individuals also impact their OA and the Department from a resource perspective

This policy establishes a series of management controls that will provide direction to Departmental managers responsible for overseeing the travel card program. These measures should help to rectify travel card abuses by exerting more aggressive consequences on those individuals who abuse or mismanage their cards and by significantly reducing the number of travel cards issued to employees. The implementation of this policy will require more active involvement by Agency Program Coordinators (A/OPCs) in managing data and disseminating current information to supervisors of employees with delinquent balances and/or inappropriate transactions so that corrective action can be initiated.

Policy Changes

1. Definition of Frequent Traveler: Public Law 105-264 requires that travelers be issued individually billed travel cards for all official government travel expenses. Each agency was afforded the discretion to define the term “frequent traveler.” Departmental policy dated November 16, 1999 “Policy on Use and Issuance of Individual Government Charge Card,” established that travel cards be issued to any employee who has traveled or is expected to travel within an 18 month period. The Department has reconsidered the criteria and has modified this definition.
   
   Effective immediately, a frequent traveler is defined as an employee who routinely travels at least twice a year. Employees who do not meet this criteria travel cards will have their credit limit lowered to one dollar. Agency A/OPCs are instructed to work with management to implement this change immediately. By leaving the limit to one dollar, A/OPCs can quickly increase the employee’s credit limit accordingly when the employee is required to conduct official government travel.

2. Automatic Reissuance of Expiring Cards: In the past, the process for reissuing expiring travel cards was automatically generated by the travel card contractor. All DOT cardholders, except those with accounts 91+ days past due, previously received a new card in the mail prior to the expiration date.
   
   Effective immediately, expiring travel cards will not be reissued to any DOT cardholder with a delinquent balance. Past due accounts will be closed upon expiration. Applications for renewal must be approved by the AOPC, the employee’s supervisor, and the OA Chief Financial Officer and Associate Administrator or Assistant Secretary. Note: Employees who maintain a current account with no past due balance will continue to receive new cards on an automatic basis.
   
   Employee Responsibilities: When employees apply for a government contractor-issued credit card, they assume the responsibility to use the card for official purposes only and to pay any charges in a timely manner. These responsibilities are delineated in the Cardholder Agreement that each employee signs during the application process.
   
   Because of the frequency and severity of travel card abuses within the Department, any violation of the Cardholder Agreement, whether for misuse or delinquency (60 days or more past due), will subject the cardholder to disciplinary action and/or the suspension or cancellation of the travel card. The Table of Penalties at the end of this policy establishes a range of penalties that may be used for travel card misuse or delinquency. Repeated travel card delinquency or misuse will result in progressively severe disciplinary actions. These actions may range from official reprimands to removal from Federal service depending on the specific circumstances involved. In certain cases, the Department’s Office of Inspector General may also refer a case to the Department of Justice for criminal prosecution.

3. Managerial Responsibility: AOPCs are responsible for monitoring monthly reports to identify inappropriate transactions and delinquent accounts. When abuses are identified, the AOPC shall immediately report this information to the cardholder’s first level supervisor or other designated organizational point of contact. DOT managers are required to counsel employees when informed about travel card misuse and delinquency, and to initiate disciplinary action as appropriate. To ensure managers are aware of the options available for correcting travel card related misconduct, they must contact the employee relations staff in their servicing Human Resource Office for assistance on a case-by-case basis before initiating disciplinary action. The appropriate disciplinary measure will depend on the specific facts related to the case. For instance, if an employee is unable to travel because his or her travel card has been suspended or revoked, and travel is a condition of employment, managers may be required to initiate action to reassign, demote or remove the employee from Federal service.
   
   Because of the impact of travel card misuse and delinquency, the attached Table of Penalties is intended to serve as a guide for administering discipline. If DOT operating administrations do not already have a table of penalties which address travel card abuse, they are to create one within 30 days of the effective date of this policy, and submit it to the Office of Financial Management, Office of the Secretary for review. The attach Table of Penalties is intended to serve as a guide to help OAs develop appropriate penalties for use in developing individual OA plans. This is offered solely as guidance. OAs need not follow it and are free to develop their own Table of Penalties for travel card abuse within their organization.

4. Procedures for Managing Canceled Accounts: Previous Departmental guidance for employees who have lost travel card privileges due to delinquency required that a waiver be obtained (and approved by the individual’s second level supervisor) for using a centrally-billed account for travel. Because of the significant administrative costs associated with the use of centrally billed accounts, these controls have been revised. Individuals who have lost card privileges due to their own negligence should not be permitted to pass this burden and cost along to OA administrative processes.
   
   Effective immediately, requests to use centrally billed accounts by employees who have lost their card, due to delinquency must now be approved by the Agency CFO and Associate Administrator or Operating Administration Assistant Secretary. As with the previous guidance on this issue, applications for waivers must be submitted on a trip-by-trip basis and include: a description of the circumstances leading to the card cancellation, and a detailed plan for clearing up any outstanding delinquencies within 6 months from the date of the original cancellation. OAs must submit a quarterly report to the Departmental CFO identifying approval waivers.
   
   Employees who have eliminated all debt to the contractor may file an appeal for reinstatement. The request must be filed through the agency AOPC and be endorsed by the agency CFO and Associate Administrator or Departmental Officer. The contractor will evaluate appeals on a case-by-case basis and has no obligation to approve requests for reinstatement.

5. Quarterly CFO Report to Heads of Operating Administrations and Secretarial Officers: Best practice in the travel card industry strongly recommends managerial involvement across organizations in monitoring programs. To ensure that top managers in the Department remain cognizant of travel card issues within their agency, the Departmental CFO will send a quarterly report to Administrators of Operating Administrations and Departmental Offices. This report will be comprised of a listing of employees who have delinquent accounts that are at least 61 days past due. OA Administrators/Departmental Officers will be requested to disseminate the listing to appropriate management and reply to the Department CFO with a case-by-case resolution for each account. In addition, the quarterly report should include information on approved waivers to use CBAs.

6. Cash Withdrawals: ATM services that are provided by the card contractor, allow for cash withdrawals by employees to use for miscellaneous expenses while on official travel (e.g., taxi, tips, parking). Use of the travel card for cash withdrawals must also be associated with an authorized trip. Use of the travel card under any other circumstance is considered misuse.
   
   Monthly limits for withdrawals have been set by DOT Operating Administrations. In the past, these monthly limits have ranged from $1,000-$4,000 per cardholder. DOT pays a service fee of one percent to the contractor for the ATM service.
   
   The Travel and Transportation Reform Act of 1998 mandates the use of the Government charge card for all expenses related to travel. This includes transportation, hotel, and meals. With the widespread acceptance of credit cards by the vast majority of merchants, the need for cash has greatly diminished in recent years. Cash limits of $4,000 per month are unnecessary and only serve to invite misuse.
   
   Effective immediately, monthly cash limits for all DOT Operating Administrations will be set at a maximum of $400 per billing cycle. OAs have the discretion to set the cash limit below $400, or on a case-by-case basis only, establish a higher cash limit based on an individual’s travel needs. This change is intended to reduce the overall likelihood for misuse by DOT cardholders and eliminate the Department’s administrative costs. The Department will track the number of employees exceeding the maximum cash limit. OAs must document the reasons for authorizing higher cash limits.

7. AOPC Responsibilities: DOT’s network of AOPCs form the backbone of travel card program management. The oversight duties performed by these individuals are critical in monitoring overall program performance, implementing Departmental policy, and alerting management of emerging problems. These responsibilities include:
   
   a. Monitoring monthly reports to identify delinquency trends or possible misuse. Potential problems are to be immediately communicated to appropriate management.
   b. Attending annual training organized by the Department, the card contractor, or the General Services Administration.
   c. Maintaining proficiency with use of contractor’s electronic reporting systems and maintaining the ability to generate a variety of ad hoc reports as requested by management.
   d. Conducting periodic account maintenance to ensure that all information for cardholders is kept accurate and up-to-date; changes in status are to be reported to the contractor immediately.
   e. Ensuring that Departmental and Agency policy is followed in making any changes to accounts.
   
   Agency Administrators are responsible for ensuring that A/OPCs are distributed across agencies in a manner that ensures an effective span of control. Agency CFOs and managers are also responsible for actively monitoring AOPC reports and acting to resolve cases of delinquency or misuse.

8. Labor Relations Obligations: Because this policy issuance establishes a series of management controls that will provide direction to Departmental managers responsible for overseeing the travel card program, OAs are reminded to consult their labor relations office before implementing this policy for the review of applicable collective bargaining agreements, and to determine notification or other statutory obligations.

9. Applicability: This policy applies to all Departmental Operating Administrations, including the U.S. Coast Guard and the Transportation Security Administration. Although these agencies have been realigned with the Department of Homeland Security, they will continue to be covered by DOT’s travel card contract until DHS establishes a separate contractual arrangement. Until then, these agencies are directed to adhere to this and all other DOT policies relating to travel card management.

A. Thomas Park
Deputy Chief Financial Officer

Date:

TABLE OF OFFENSES AND DISCIPLINARY ACTIONS FOR DELINQUENT AND UNAUTHORIZED USE OF THE GOVERNMENT TRAVEL CHARGE CARD

The following table is provided as guidance for administering discipline for the unauthorized use of the Government approved charge card accounts, for other than disputed charges. This table includes a range of penalties providing the supervisor with latitude to consider appropriate mitigating or aggravating circumstances. Columns delineating the number of offenses, first, second, and third, are provided for the application of progressive corrective actions. NOTE: This table is solely a sample. OAs need not follow this table and are free to develop their own Table of Penalties for their organization.