[Comments on DNA Proposal To Use Corporate Charge Cards]

B-230696, Mar 30, 1988, Office of General Counsel

CIVILIAN PERSONNEL - Travel - Actual Subsistence Expenses - Credit Cards - Use DIGEST: Finance and Accounting Officer, Defense Nuclear Agency, is advised that we have no legal objection to proposal to use Citicorp Diners Club corporate charge cards since the proposal would limit the risk to the government to the maximum extent possible. The cards are to be used by designated officials for lodging and subsistence expenses incurred by Soviet inspection teams in this country in compliance with the INF Treaty. Any particular problems or question as to the individual's or government's liability may be presented to this Office for determination. See cases cited.

Lieutenant Colonel D. M. Newman, Finance and Accounting Officer, Defense Nuclear Agency:

We refer to your letter of March 11, 1988, requesting our opinion of a proposal by the Defense Nuclear Agency (DNA) to use corporate charge cards issued by Citicorp Diners Club under limited circumstances.

The DNA is responsible for providing finance and accounting support for the On-Site Inspection Agency (OSIA), which is charged with escorting Soviet inspectors who will verify United States compliance with the Intermediate Nuclear Forces (INF) Treaty. The INF Treaty specifies that the inspected party shall provide, or arrange for the provision of, meals, lodging, work space, transportation, and, as necessary, medical care for the inspection team and aircrew of the inspecting party during the period they are in this country.

Limited notice prior to short-term visits by Soviet inspection teams will not provide enough time for the DNA to use established invitational travel reimbursement procedures, and you do not deem it prudent for OSIA personnel, who will accompany Soviet delegations, to carry enough cash to defray Soviet expenses. Therefore, you have proposed procedures which entail the use of a Citicorp Diners Club corporate charge card and travelers checks. The Deputy Assistant Secretary of Defense, Comptroller (Management Systems) has concurred in the adoption of the procedures.

There is a potential for abuse in the issuance of these corporate charge cards since the government and not the individual is charged with the responsibility for payment. In this case, the DNA Finance and Accounting Office will process and pay the bills directly to Citicorp upon receipt of proper evidence. However, we note that your proposal would limit the risk to the government to the maximum extent possible. The Diners Club credit card will bear the inscription "For OSIA Official Use" and, in addition, will contain the name of the designated OSIA official who is personally charged with responsibility for the card.

We also note that the proposal provides that the use of the Diners Club credit card is limited to lodging and subsistence expenses and does not include its use for travel arrangements. Thus, it is presumed that you will continue to follow the government's policy of utilizing U.S. Government Transportation Requests to purchase common carrier passenger transportation services, where feasible.

The proposal also provides that the designated OSIA representatives will be instructed on the use of the Diners Club credit card and that they will be personally liable for any unauthorized or personal expenditures and for a failure to timely report its loss under the applicable provisions of the Truth in Lending Act, 15 U.S.C. Sec. 1643 (1982). In effect, the designated officials are acting as accountable officers since they retain custody of the card. Although it is impossible for us to anticipate any particular problems or questions that might arise at a late date as to the government's or individual's liability, we would point out that such questions may be presented to this Office for a determination. See 64 Comp.Gen. 456 (1985); 55 Comp.Gen. 1181 (1976); 31 U.S.C. Sec. 3527 (1982).

Accordingly, we have no legal objection to the proposal by DNA to use Citicorp Diners Club corporate charge cards under the circumstances presented.