Monday, August 7, 2017

Government To Tighten Up Controls over Purchase and Travel Card Use and Abuse

The term "data analytics" refers to qualitative and quantitative techniques and processes used to enhance productivity, business gain, and very importantly, to detect and prevent fraudulent activity. Perhaps you've received calls from your credit card company asking you to confirm certain recent charges to your card. How did thy pick you? How did they pick particular charges? Well, somehow, those charges were outside the norm for you. How do they know that? Through the use of "data analytics". Or, you might have noticed that when accessing a website, you see advertising for an item that you just read up on. You might have been reading about all the wonderful features of the latest Ford or GM model then you browse headlines on CNN and find advertising for Ford or GM. How do they do that? Through the use of "data analytics".

Industry has been using and refining data analytics for quite some time. The Government, not so much. And to a certain extent, that's understandable. Credit card companies for example are liable for fraudulent charges. Someone steals and card and makes unauthorized charges, the credit card company is ultimately liable, not the card holder. In the Government's case however, losses or unauthorized purchases are simply passed on to the taxpayer. Or take the case of advertising. GM and Ford need to sell vehicles for business gain. The Government doesn't need to sell anything. There is no inherent business gain in anything the Government does.

The Government's disinterest in "data analytics" may be changing. The Senate just passed Senate Bill 1099, Saving Federal Dollars Through Better Use of Government Purchase and Travel Cards Act of 2017. This bill is intended to provide for the identification and prevention of improper payments and the identification of strategic sourcing opportunities by reviewing and analyzing the use of Federal agency charge cards.

Specifically, this Bill will require OMB and GSA to develop a strategy to expand the use of data analytics in managing government purchase and travel charge card programs. These analytics may employ existing GSA capabilities (which are probably negligible), and may be in conjunction with agencies' capabilities, for the purpose of
  1. identifying examples or patters of questionable transactions and developing enhanced tools and methods for agency use in 
    • identifying questionable purchase and travel card transactions; and
    • recovering improper payments made with purchase and travel cards
  2. Identifying potential opportunities for agencies to further leverage administrative process streamlining and cost reduction from purchase and travel card use, including additional agency opportunities for card-based strategic sourcing
  3. developing a set of purchase and travel card metrics and benchmarks for high-risk activities, which shall assist agencies in identifying potential emphasis areas for their purchase and travel card management and oversight activities, including those required by the Government Charge Card Abuse Prevention Act of 2012
  4. Developing a plan, which may be based on existing capabilities, to create a library of analytics tools and data sources for use by Federal agencies (including inspectors general of those agencies).
The misuse of Government purchase and travel cards are significant and widespread and the costs have been essentially born by the taxpayers. Perhaps this Bill will help reduce the number of occurrences of misuse or stop the activities before they become significant. 

Government contractors might want to follow these developments to see if there is something that can be adapted to their own internal control systems.

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