New OMB guidelines target charge card use

OMB Circular A-123

The Office of Management and Budget has issued new guidelines tightening management controls on government charge card programs.

The guidelines are intended to establish minimum requirements and suggest best practices for the management of card programs, including fraud prevention, user training and strategic sourcing.

Government charge cards look and are used like commercial credit cards. The same financial institutions issue them for authorized agency personnel. There are several types of charge cards, including purchase and travel cards. The OMB guidelines cover all types.

The guidelines, which are issued as Appendix B of OMB’s revised Circular A-123, require agencies to develop and maintain a charge card management plan that, among other measures:

* Identifies the key management officials within the agency and defines their responsibilities, a step designed to create accountability.

* Implements a process to make sure individuals authorized to use the cards are credit-worthy.

* Establishes management controls, polices and practices.

* Creates requirements for documentation and the records retention.

* Establishes a process for the agency to get charge cards returned when employees leave an agency.

* Describes the measures the agency will use to ensure that the other elements of the plan are working effectively.

The 52-page amendment goes on to lay out specific OMB requirements for training cardholders, risk management procedures and other specific elements, while leaving many particulars to the discretion of agencies.

It also includes strategic sourcing requirements, a process of continually analyzing the way agency funds are spent and taking steps to get the best deal possible for government buyers from suppliers. The amendment encourages agencies to use a set of best practices to analyze spending, balance socioeconomic goals with agency priorities and establish performance measures to judge strategic sourcing success.

Many agencies are already running programs to manage card use and trying out technologies for data mining and analysis. The forthcoming OMB guidelines add urgency to the efforts, said Cheryl Upton, purchase card team leader at the Environmental Protection Agency, in a recent interview.

The revised Circular encompasses a broad swath of financial management topics. It goes into effect with the new fiscal year, Oct. 1.