1. OMB Update on Charge Card Management Kim Farington, CPA Betsy Newcomer, MBA U.S. Office of Management and Budget Office of Federal Financial Management 11 th Annual Smart Pay Training Conference July 28-30, 2009

2. Agenda Performance Framework Key Financial Management Results Charge Card Framework Circular A-123 Appendix B Revision Other Current Events Recovery Act 2

3. Performance Framework 3

4. Key Financial Management Results 4

5. Previous Charge Card Framework Internal Controls Results Reduce fraud, waste, abuse Charge Card Management Plan Training Strategic Sourcing Risk Management Credit Worthiness Refund Management 5

6. New Charge Card Framework Compliance (Circular A-123 Appendix B) Results Reduce fraud, waste, abuse Charge Card Management Plan Training Strategic Sourcing Risk Management Credit Worthiness Refund Management Property Management Convenience Checks 6

7. Appendix B Revision 7 Revision Published January 15, 2009* Incorporates recommendations from GAO Report Governmentwide Purchase Cards: Actions Needed to Strengthen Internal Controls to Reduce Fraudulent, Improper, And Abusive Purchases (GAO-08-333) Monitoring Government Credit Card Abuse Prevention Act Agency Program Coordinators Input and Recommendations Incorporated * http://www.whitehouse.gov/omb/assets/agencyinformation_circulars_pdf/a123_appendix_b.pdf

8. Appendix B Revision (cont’d) Key changes included: Internal controls for convenience checks; Require prior approval or subsequent review purchase transactions under the micropurchase threshold; Disciplinary action associated with fraud and misuse; Receipt and acceptance of items obtained with a purchase card; Inventory sensitive property; and Penalties associated with fraud and misuse. 8

9. Other Current Events MAX Reporting for Executive Agencies –Electronic reporting required as of May 2009 –URL: max.omb.gov Charge Card legislation S.942 –April 2009 –Expands on last year’s S. 789 CFO Metrics Tracking System –Delinquency rates July 2009 9

10. Recovery Act 10 Memorandum M-09-15 –Updated Implementing Guidance for the American Recovery and Reinvestment Act of 2009 Memorandum M-09-10 –Initial Implementing Guidance for the American Recovery and Reinvestment Act of 2009 –February 18, 2009 April 3, 2009 –Specifically addresses purchase card use Memorandum M-09-21 –Implementing Guidance for the Reports on Use of Funds Pursuant to the American Recovery and Reinvestment Act of 2009 –June 21, 2009

11. Memorandum M-09-15 1.14 What are the relevant requirements and issues related to purchase card use under the Recovery Act? –GSA SmartPay® purchase cards can be used for official purchases in support of the Recovery Act, consistent with OMB Circular A-123, Appendix B, and agency policy. Purchase cards use a streamlined and cost-effective business process compatible with the need to quickly and transparently support the delivery of Recovery Act programs to the taxpayer and other beneficiaries. –Cardholders should follow typical transaction reconciliation procedures, but must reconcile purchases to the accounting code(s) and provide appropriate Recovery Act transaction description(s) (if applicable) as specified by agency policy for Recovery Act transactions. –Purchases below the micro-purchase threshold using the GSA SmartPay® purchase cards should be recorded in Agency systems in accordance with existing Agency policy. Purchases above the micro- purchase threshold using the GSA SmartPay® purchase cards should be reported through the Federal Procurement Data System – Next Generation (FPDS-NG). GSA SmartPay® purchase cards continue to be available for use as a payment mechanism under purchase orders and contracts annotated as required by your agency policy this Guidance. 11

12. Memorandum M-09-15 (cont’d) –Additional purchase card accounts can be established with a Recovery Act accounting code as a default. However, agencies should exercise caution in doing so to ensure that the total number of purchase cards issued remains manageable, appropriate Agency/Organization Program Coordinator span of control is maintained, and internal controls consistent with OMB Circular A-123, Appendix B, remain in effect. These “dedicated” purchase cards should only be established in circumstances where agencies anticipate a high volume of Recovery Act -related transaction activity and/or there is a high risk of errors in reconciling transactions to the appropriate Recovery Act accounting code(s). Furthermore, agencies should explore the use of cardless accounts under the GSA SmartPay® program where a high volume of Recovery Act -related transactions with a particular vendor is expected. –Initially, all transactions, including purchase card spending, will be included in the gross outlay reporting by TAFS, not by individual transaction. Instructions on more detailed reporting may be included in future updates to this guidance. 12

13. Questions? Office of Federal Financial Management U.S. Office of Management and Budget (202) 395-3993 kfarington@omb.eop.gov bnewcomer@omb.eop.gov Blank