1. Federal Acquisition Service U.S. General Services Administration Pre- and Post Payment Audits: It’s the Law Donna Jack, GSA Transportation Audits Wednesday, April 20, 2011

2. Federal Acquisition Service U.S. General Services Administration Agenda 2  Mission/Vision  Transportation Audits Division Branches  Transportation Audits Systems  What’s Mandated  Statutes  Agency Requirements  Points of Contact

3. Federal Acquisition Service U.S. General Services Administration Mission – To identify and recover Transportation Service Provider (TSP) overcharges and all other debts relating to transportation bills paid by agencies around the world. Vision – A resource center providing current, efficient, and accurate audits for customer agencies as well as traffic management advice and reviews and the single most robust Transportation Audits Electronic Library in the world. Mission & Vision 3

4. Federal Acquisition Service U.S. General Services Administration Transportation Audits 4 Disputes Resolution Accounts & Collections Audit Policy & Review GSA Audits Division Division is comprised of 3 branches…

5. Federal Acquisition Service U.S. General Services Administration Disputes Resolution Branch 5  Oversees pre-payment and post-payment audits of transportation bills  Produces transportation service provider (TSP) Notice of Overcharge (NOC)  Reviews/settles post-payment audit claims  Approves/declines TSP protests  Provides agencies Management Information and Reporting from billing documents  Represents the US Government in cases of bankruptcies

6. Federal Acquisition Service U.S. General Services Administration Accounts and Collections Branch 6  Initiates actions to collect debts owed to the U.S. Government by TSPs  Directs TSP payments and deposits  Tracks debt collection through automated internal processes and systems  Processes and collects unused/expired airline tickets for federal agencies  Assists the Department of Justice in bankruptcy and other circumstantial related debts

7. Federal Acquisition Service U.S. General Services Administration Audit Policy and Review Branch 7  Resolves complex transportation issues  Prepares legal and technical reports for use in prosecuting or defending lawsuits by or against an agency  Reviews agency policies, programs, and procedures  Manages the Agency Review and Assistance Program (ARAP)  Manages the Transportation Electronic Audit Library  Maintains the Tariff and Tender Library  Manages repository for all paid transportation documents  Represents the US Government and submits opinions to the Civilian Contract Board of Appeals

8. Federal Acquisition Service U.S. General Services Administration Transportation Audits Systems  Transportation Electronic Audit Library (TEAL)  Transportation Accounts Receivable Payable System (TARPS)  Accounts Receivable Tracking System (ARTS) 8

9. Federal Acquisition Service U.S. General Services Administration 9 Transportation Electronic Audit Library (TEAL)  Maintains a reference library of tariffs, contracts, and special rate quotations for all modes of transportation  Future goals-  Create a web based electronic platform to provide public access to all non-proprietary records.  Include Civilian Board of Contract Appeals (CBCA) cases and electronic audit recording.

10. Federal Acquisition Service U.S. General Services Administration Transportation Accounts Receivable Payable System (TARPS)  Internal system keeps track of A/R and A/P  Automated internal offsets  Generates various reports  TSPs can use to check the status of TSP claims  Future goal is to get TARPS on a web based platform 10

11. Federal Acquisition Service U.S. General Services Administration 11  Tracks the frequency of submissions of bills by each paying office identified by agency location codes  Generates a list of agencies not submitting documents for follow-up correspondence to the delinquent agency  Importance: Opportunities for ARAP visits Accounts Receivable Tracking System (ARTS)

12. Federal Acquisition Service U.S. General Services Administration What’s Mandated  Post payment audits were mandated by The Transportation Act of 1940 as amended 31 USC 3726  Prepayment audits were mandated by Public Law 105-264 under the Travel and Transportation Reform Act of 1998  Both are subject to Congressional oversight  GSA Office of Inspector General monitors Transportation Audit’s Quarterly Reports 12

13. Federal Acquisition Service U.S. General Services Administration 13 Important Statutes  Audit Regulation 41 CFR 102-118 interprets statutes and other policies that assure that payment and payment mechanisms for agency transportation services are uniform and appropriate. This part communicates the policies clearly to agencies and transportation service providers (TSPs)  Public Law 85-762 enacted Aug. 26, 1958 amended Section 322, right to deduct - 3 years subsequent to the payment of the original bill. Claims against the Government limited to 3 years

14. Federal Acquisition Service U.S. General Services Administration 14 Important Statutes (cont.)  The Debt Collection Act of 1982 limited the Government’s right of administrative offset to 10 years, and is applied to debts other than rate issues.  The Transportation Payment Act of 1972, amended Section 322, and permitted payment for transportation in advance of performance, if it is authorized by a specific law {see 31 U.S.C. 3324(b)(1)(1988)], in contrast to the Government’s prior right to refrain from payment until after performance. Preserves recovery by deduction, of charges for services ordered and not performed. Unused/expired airline tickets are included in this category.

15. Federal Acquisition Service U.S. General Services Administration Important Statutes (cont.)  The Travel and Transportation Reform Act of 1998 (Public Law 105-264) amended Section 322 to allow for the prepayment audit of all Government transportation bills, effective April 20, 2000.  A post-payment audit review of prepayment-audited items continue to evaluate the effectiveness of the prepayment audit or when the Administrator of GSA waives prepayment audit requirements.  The Transportation Audits Division will also adjudicate claims that cannot be resolved at the agency level.  The Prompt Payment Act (Public Law 97-177), as amended 31 U.S.C. Chapter 39 provides that Federal agencies of the Executive Branch pay bills on time (30 days), pay interest and penalties when late, and take discounts when payments are effected by the discount date. 15

16. Federal Acquisition Service U.S. General Services Administration Pre-payment vs. Post-Payment Pre-payment AuditPost Payment Audit Mandated by Congress, effective 2002Mandated by Congress All Federal Agencies, including DoD Audit of transportation charges prior to payment Audit of transportation charges after payment Agency responsible for conducting auditGSA responsible for conducting audit Agency can create an internal pre-payment audit program; contract directly with a pre- payment audit service provider; or use the a pre-payment audit contractor under GSA’s schedule GSA audits all paid transportation billings, electronic and paper, using contract auditors. The program is supported by collections Billing errors caught immediately. Agency retains funds that would have been paid in error Billing errors caught after payment. GSA recovers funds that were erroneously paid 16

17. Federal Acquisition Service U.S. General Services Administration Agency Requirements  What is a prepayment audit? (102-118.265) Review of a Transportation Service Provider (TSP) bill that occurs prior to an agency making payment to the TSP.  Must my agency establish a prepayment audit program ? (102- 118.270 and 102-118.325) Yes, 31 U.S.C. 3726 requires agencies to establish a prepayment audit program and obtain approval from GSA. Submit plans to: QMCATariffs@gsa.gov, subject: “Agency PPA”QMCATariffs@gsa.gov  What options for performing a prepayment audit does my agency have? (102-118.285) Options include: o Create an internal prepayment audit program; o Contract directly with a prepayment audit service provider; or o Use the services of a prepayment audit contractor under GSA’s multiple award schedule. 17

18. Federal Acquisition Service U.S. General Services Administration Agency Requirements  What are the elements of an acceptable prepayment audit program? (102-118.330) An acceptable audit program must: o Verify all transportation bills against filed rates and charges before payment o Comply with the Prompt Payment Act o Require your agency’s paying office to offset debts, if directed by GSA’s Audit Division, from amounts owed to TSP within 3 years o Be approved by the GSA Audit Division o Complete accurate audits of transportation bills and notify TSP of any adjustments within 7 calendar days of receipt o Forward documentation monthly to GSA Audit Division, which will store paid transportation bills for 3 years 18

19. Federal Acquisition Service U.S. General Services Administration Agency Requirements 19  Must my agency send all quotations, tenders, or contracts with a TSP to GSA? (102-118.260) Yes, your agency must send copies of quotations, tenders, or contract of special rates, fares, charges or concessions with TSPs including those authorized by 49 U.S.C. 10731 and 13712 to: General Services Administration, Transportation Audit Division (QMCA), Crystal Plaza 4, Room 300, 2200 Crystal Drive, Arlington, VA 22202, www.gsa.gov/transauditswww.gsa.gov/transaudits.

20. Federal Acquisition Service U.S. General Services Administration Agency Requirements 20  Who is responsible for keeping my agency’s electronic commerce transportation billing records? (102-118.80) Your agency's internal financial regulations will identify responsibility for recordkeeping. In addition, the GSA Audit Division keeps a central repository of electronic transportation billing records for legal and auditing purposes. Therefore, your agency must forward all relevant electronic transportation billing documents to: General Services Administration Transportation Audit Division (QMCA) Crystal Plaza 4, Room 300 2200 Crystal Drive Arlington, VA 22202 www.gsa.gov/transaudits

21. Federal Acquisition Service U.S. General Services Administration Agency Requirements 21  Will the widespread mandatory use of prepayment audit eliminate post audits? (102-118.415) No, GSA has a Congressionally mandated responsibility to perform oversight on transportation bill payments.  Submission of Hard Copy Paid Transportation Bills for Post- payment Audit (Handbook) Submissions should be made in the following manner: General Services Administration Sheltered Occupational Center (SOC) Paid Document Receiving Unit 13882 Redskin Drive Herndon, VA 20171

22. Federal Acquisition Service U.S. General Services Administration Tools to help fulfill agency requirements 22  GSA Third Party Payment Service (3PPS) Through 3PPS pre-payment audit, help agencies comply with Federal pre-payment mandates. Provides full audit trail of transactions to customer agencies and GSA – improving transparency between pre- and post-payment audits. All TSPs will have a common interface and will be required to submit invoice through the service, thus giving full visibility to GSA and Customers.

23. Federal Acquisition Service U.S. General Services Administration Points of Contact DirectorMary Bates (703) 605-9402 mary.bates@gsa.gov Deputy Director Accounts & Collections Branch Chief Joyce Clark (703) 605-9420 joyce.clark@gsa.gov Annie Scott (703) 605-9425 annie.scott@gsa.gov Audit Policy and Review Branch Chief Donna Jack (703) 605-3488 donna.jack@gsa.gov Disputes Resolution Branch Chief Anita Connelly (703) 605-9436 anita.connelly@gsa.gov Carrier Claims Status InquiryCarl Crea (703)605-9435 carl.crea@gsa.gov 23