Cash Management:

Benefits and Limitations of the Small Purchases Credit Card Program

AFMD-90-89BR: Published: Sep 11, 1990. Publicly Released: Sep 25, 1990.

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Pursuant to a congressional request, GAO provided information on the federal government's small purchases credit card program.

GAO found that: (1) seven participating agencies were generally satisfied with the small purchases credit card program, since it enabled them to reduce the paperwork needed to make purchases and expedite the procurement process; (2) agencies were generally dissatisfied with the administrative fee they paid for using the small purchases credit card; (3) the administrative fee will decline substantially as more agencies participate in the program and total government purchases with the card exceed $50 million; (4) the agencies' reported savings to the Department of Treasury could be inaccurate; and (5) four of the seven reviewed agencies had various weaknesses in their implementation of the internal controls over the small purchases credit card programs.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: Treasury issued instructions to all federal agencies using the small purchase credit card to conduct their own cost benefit analysis to calculate their savings.

    Recommendation: In order to accurately assess the savings associated with using the small purchases credit card program, the Secretary of the Treasury should revise the instructions to agencies for reporting savings from the small purchases credit card program. Those instructions should require that agencies calculate their savings estimates based on their costs for using the small purchases credit card versus other procurement and payment methods, covering the entire procurement and payment process.

    Agency Affected: Department of the Treasury

 

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