Travel Cards: Air Force Management Focus Has Reduced Delinquencies, but Improvements in Controls Are Needed

DOD's last Charge Card Task Force Status Report was issued on December 18, 2002, two days before we issued our Air Force Travel Card report, which included the above recommendation. However, the Task Force report (referred to within DOD as Management Initiative Decision (MID) 904) provided a mechanism for addressing recommendations in our Air Force travel card report through Integrated Product Teams (IPT). The IPT was charged with creating solutions to purchase card and travel card control weaknesses identified in GAO and DOD audit reports based upon Senior Steering Group strategic direction. Based on our participation in DOD's February 2003 IPT strategic planning conference, we determined that DOD had focused senior management attention on (1) developing appropriate solutions to identified problems, (2) establishing implementation schedules that incorporate actions on GAO audit recommendations, and (3) monitoring corrective actions.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance states that in accordance with federal law and the DOD Financial Management Regulation, the travel card contractor bank is to perform a credit check on, and evaluate the credit history of, all DOD travel card applicants and is not to issue an individually billed travel card to any applicant who scores below the DOD-established lending criteria. Individuals who decline a credit check, or who have no credit history, will be asked to self-certify their credit worthiness. If an individual refuses both the credit check and self-certification, they will not be issued a travel card and individuals who only self-certify will be issued a restricted travel card.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance allows that individuals who routinely travel less than three times a year are exempt from mandatory use of the individually billed travel card account. Further, the guidelines require agency program coordinators to review card usage quarterly and identify/close accounts of infrequent travelers.

On August 12, 2005, the Air Force issued a Revision to the Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts), which gives agency program coordinators (APC) authority to activate and deactivate accounts in order to properly manage the Air Force travel card program, including consideration of active travel orders. The Interim Guidelines also provide controls related to creditworthiness, general review of transactions, and cardholder responsibilities and training, which provide added assurance that risk of delinquencies associated with lower ranking service members is mitigated. Our participation in the Air Force November 1, 2005, Travel Card Training Conference and our review of contractor bank data on delinquencies confirmed that Air Force actions have significantly reduced its travel card delinquency rate from 6 percent at the time of our audit to about 1.5 percent.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance establishes specific cardholder responsibilities, including timely payment of the individual's travel card bill and any late fees, preparation of the travel voucher for reimbursement, reporting of lost or stolen travel cards, and authorized uses of the card. In addition, the guidelines require travel cardholders to maintain receipts and other travel card transaction documentation for 6 years and 3 months, review and reconcile transactions in a timely manner, promptly resolve questionable transactions and initiate and track disputes to completion, maintain physical security of their government travel card, complete initial and refresher training, turn in the travel card when separating from the Air Force, and immediately notify the contractor bank of any changes in cardholder point of contact information. In addition, the Air Force requires commanders and supervisors to ensure that all Agency Program Coordinators (APC) are fully trained to perform their tasks. Required APC training includes Electronic Account Government Ledger System (EAGLS) training from the contractor bank for program management and account monitoring, online training and standard DOD training, annual attendance at the Air Force APC Training Conference, attendance at the GSA SmartPay Training conference, and GSA web training courses. APCs provide new cardholders with initial training as well as refresher training every two years and retain documentation of completed training. In addition cardholders are encouraged to complete GSA Web training.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance makes commanders and supervisors responsible for the effective administration and management of the travel card program, including providing adequate resources and appointing agency program coordinators (APC) who possess the knowledge, skills, and ability required to perform APC responsibilities effectively and efficiently. The guidelines specify primary skills necessary to fulfill APC responsibilities as analytical ability, effective communication skills, and computer literacy. The guidelines also state that commanders should give APCs the necessary time to perform their day-to-day responsibilities. In addition, the guidelines reiterate the DOD recommendation for avoiding high APC turnover by requiring that commanders evaluate the feasibility of using civilian personnel in this position whenever possible.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance requires that adequate agency program coordinator (APC) positions be provided to meet program needs and that commanders give APCs the necessary amount of time to perform day-to-day APC responsibilities. To avoid high APC turnover, the guidelines reiterate the DOD recommendation that commanders evaluate the feasibility of using civilian personnel in this position whenever possible. Further, the guidelines set the targeted number of cardholders assigned to any one APC at 200 and state that the maximum number of cardholders assigned to any one APC should not exceed 300. Given improvements in management of individually billed travel card program and significant reductions in the delinquency rate, we consider these actions to be consistent with the intent of our recommendation.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance requires that all agency program coordinators (APC) (Major Command and then installation level APCs) are fully trained to perform their tasks. At a minimum, training is required to include (1) Electronic Account Government Ledger System (EAGLS) training from the contractor bank for program management and account monitoring, (2) Web-based training on standard DOD training materials, (3) annual attendance at the Air Force APC Training Conference (for hierarchy Level 3 APCs), (4) annual GSA SmartPay training for all Level 3 APCs, which is encouraged for all APCs, and (5) additional training for cardholders and APC through the GSA Web site.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance established agency program coordinator (APC) responsibilities, including review of EAGLS Monthly exception reports. The guidance requires APCs to use the EAGLS tool to generate several exception reports, including reports on returned checks, and notify supervisors and commanders/organization heads of delinquencies and/or allegations of improper, fraudulent, abusive, or negligent cardholder use of the travel card.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program Individually Billed Accounts. This guidance established APC responsibilities, including review of EAGLS Monthly exception reports. The guidance requires commanders (or their designees) to designate or revoke travel charge card APC appointments in writing and retain the letter on file for at least 6 years and 3 months after the APC is replaced. A copy of the Appointment/Revocation Letter is to be e-mailed or faxed to the parent level APC, who should retain a copy for his or her records.

In lieu of establishing a separate Air Force-wide database, during fiscal year 2003 the Air Force Office of Special Investigations initiated quarterly reporting on its purchase card investigations to the DOD Inspector General for macro level analysis of systemic weaknesses in the program. In conjunction with our participation and DOD IG participation at the Air Force Travel Card Conference on November 1, 2005, we confirmed that Air Force auditors and investigators are actively supporting DOD IG travel card oversight and data mining activities. In addition, APCs perform a number of reviews of account activity designed to detect problem transactions, including reviews of activity related to infrequent travelers, orphaned accounts, delinquency metrics, blocked merchant codes reports, and EAGLS monthly exception reports. We consider these actions consistent with the intent of our recommendation.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance provided specific controls for resolving orphan accounts whereby the accounts are automatically deactivated after 31 days if the employee does not contact his new unit agency program coordinator (APC) to have his or her travel card account transferred, unless the APC identifies the correct organization and updates the records at the contractor bank.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance requires agency program coordinators (APC) to notify losing and gaining unit commanders/supervisors of individuals with unpaid balances. APCs are also required to immediately inform the supervisor and commander/head of the organization of delinquency and/or allegations of improper, fraudulent, abusive, or negligent cardholder use of the government travel card. It also requires the APC to retain records documenting any cardholder fraudulent or abusive use, as well as a copy of the notice to the supervisor. Losing APCs are required to provide gaining APCs with a copy of the cardholder's file, including documentation of any abuse within 30 days of departure--the point at which the account would be terminated if not activated by the gaining APC.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance requires supervisors and commanders to take appropriate action in accordance with DOD guidelines regarding suspension of security clearances for cardholders who are delinquent in paying their travel charge card balance or have allegedly misused their cards. In addition, the guidelines state that any information that could impact the trustworthiness of an employee should be forwarded to the Security Manager for appropriate review.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance requires that commanders establish procedures to ensure that (1) cardholders pay travel charge card balances prior to separation or transfer and (2) agency program coordinators (APC) are specifically included on all deployment, Permanent Change of Station, or separation checklists in accordance with DOD guidance. Further, APCs are required to coordinate with local military and civilian personnel offices to routinely obtain separation notices and immediately close travel card accounts at separation, termination, death, or retirement of cardholders. In addition, the guidelines require commanders to ensure that an actual process is in place to use split disbursements or that the travel order reflects that the travel is Mission Critical and it is therefore not possible for the individual to file interim vouchers. Further, based on the travel order designation, the APC can notify the contractor bank not to take collection actions until 45 days after the Mission Critical designation is removed.

On August 12, 2005, the Air Force issued a revision to Interim Guidelines, Procedures, and Responsibilities for the Air Force Travel Card Program (Individually Billed Accounts). This guidance requires unit and base-level agency program coordinators (APC) to proactively identify and manage individually billed travel card accounts of separated, terminated, deceased, or retired cardholders. APCs are to coordinate with local military and civilian personnel offices to routinely obtain separation notices and immediately close the accounts and to make every effort to ensure travel card balances are paid prior to cardholder's departure, or in the case of death, paid from the final travel voucher. The guidance details specific procedures for handling each type of employee transfer and termination. APCs are also authorized to request commander assistance in obtaining payment of travel card balances. Although the guidance does not specifically require APCs to compare cardholder and payroll data, we consider the APC contact with the personnel office and other procedures noted to meet the intent of our recommendation.