U.S. General Services Administration GSA SmartPay Saves Innovative

U.S. General Services Administration GSA SmartPay Saves Innovative

U.S. General Services Administration GSA SmartPay Saves Innovative Payment Solutions presented by Andrew Y. Lee GSA Office of Charge Card Management GSA SmartPay Saves Training Agenda

Laws, Regulations, Legislation, and Reporting Getting More Out of GSA SmartPay GSA SmartPay 2 Innovative Solutions Innovative Solutions in Action Where Can My Agency Start? Where is the Market Going? What is innovation to you? Laws, Regulations, Legislation, and Reporting Current Regulatory Landscape In-progress

Legislation and Initiatives Governmentwide Charge Card Reporting Government Charge Card Abuse Prevention Act of 2011 (P.L. 112-194) Reinforces prevention of fraud, waste, and abuse; many requirements are addressed in existing OMB Circular A-123, Appendix B guidance: Provides additional Inspector General requirements not addressed in the OMB Circular A-123, Appendix B Department of Defense Purchase Card specific requirements are addressed Highlights include: Annual certification for fraud risk mitigation New requirements for Annual Charge Card Management Plans

Semi-Annual Joint Purchase & Integrated Card Violation Report Inspector General Audits Current In-progress Government1 Regulatory Landscape Legislation and Initiatives wide Charge Card Reporting Office of Management & Budget Memorandum M-13-21 Clarification of requirements in PL 112-194 for

agencies to establish charge card safeguards and internal controls Reporting for Purchase and Integrated card violations Establishes penalties for violators Dismissal for Purchase Card violations only Requires each agency Inspector General conduct risk assessments and audits to identify fraud and improper use of charge cards 2 Current Regulatory Landscape In-progress Legislation and Initiatives

Governmentwide Charge Card Reporting Treasury Financial Manual Updates Agency procedures should encourage the use of charge cards as a method of contract payment (consistent with FAR Part 13.301). Review procedures must include data mining Maximize sales and productivity refunds Increase the use of strategic sourcing programs. Review accounts payable files and analyze spending patterns to find opportunities for savings 3 Current Regulatory Landscape

In-progress Legislation and Initiatives Governmentwide Charge Card Reporting Saving Federal Tax Dollars Through Better Use of Government Purchase and Travel Cards Act of 2015 Passed by the United States Senate in December 2015, awaits action in the House of Representatives. Requirements include: Data Analytics Information Sharing Interagency Group

Develop a strategy to expand use of data analytics in managing government Purchase and Travel card programs. Issue guidance on improving information sharing by Federal Government agencies. Establish a Purchase and Travel Charge

Card Data Management Group to develop and share best practices. 4 Current Regulatory Landscape Reporting Submit reports to Congress for implementation of Act, including whether metrics

have reduced improper payments and additional savings opportunities. In-progress Legislation and Initiatives Governmentwide Charge Card Reporting OMB Circular A-123 Appendix B Re-write Update to reflect PL 112-194 requirements and revised GAO green book on internal controls Increase emphasis on data analytics and information sharing Addresses requirements for Fleet

5 Current Regulatory Landscape In-progress Legislation and Initiatives Governmentwide Charge Card Reporting Federal Travel Regulation Policy Update GSA proposed to amend the Federal Travel Regulation to further encourage travel card use: FTR Case 2015-304: Proposed rule discourages ATM

withdrawals by Including ATM fees in incidental expenses, rather than reimbursing as a miscellaneous expense, will increase the Governments ability to project travel costs, improve cost control, and simplify rules of official travel. FTR Case 2015-303: Proposed rule updates the list of exemptions to the mandatory use the Travel Card, by enhancing appropriate use of Travel Cards for employees on official Federal Government travel. 6 Current Regulatory Landscape In-progress Legislation and Initiatives

Governmentwide Charge Card Reporting Government-wide Charge Card Program Metrics OCCM worked closely with agencies/organizations to develop an initial set of program metrics. Metrics include the following: Disputed Charges Single Merchant Data Analytics Questionable MCC Number of accounts with disputed charges. Trends in

dates and amounts of disputed charges. May indicate potential areas of fraud, misuse, and abuse. Number of accounts with at least 10 transactions and an 80% or greater spending percentage at a single merchant. May provide insight for spend trends and authorization controls.

OMB requires agencies to utilize the data analytics tools. These tools help A/OPCs in identifying potential areas of waste, misuse, and abuse. Number of transactions and spend amount with merchants that are listed under MCCs that have been identified for follow up for questionable government spending.

7 Current Regulatory Landscape In-progress Legislation and Initiatives Governmentwide Charge Card Reporting Government-wide Charge Card Metrics Dashboard 8

Current Regulatory Landscape In-progress Legislation and Initiatives Governmentwide Charge Card Reporting Getting More Out of GSA SmartPay Savings Calculator Accounts Payable File

Review GSA SmartPay Savings Calculator Available at http://smartpay.gsa.gov/about-gsa-smartpay/program-statistics/savings-calculator OCCM developed the GSA SmartPay Savings Calculator to be an interactive tool for agencies to estimate the impact of transferring spend to GSA SmartPay payment solutions The tool is designed to enhance and support leadership payment decision making Provides estimates for potential savings based on increased utilization Please note that the tool assumes any generated refunds are provided directly to the agency

9 Savings Calculator Accounts Payable Review Accounts Payable File Review An A/P File Review is a systematic review of accounts payable files to identify spend opportunities Customers must provide GSA SmartPay contract banks with at least one year of information Information that includes payment date Vendor information including name, address, and identification Cost center and expense codes GSA SmartPay contract bank will provide:

10 Recommendations to increase use of GSA SmartPay A list of key vendors that the agency does business with but does not accept cards Industry best practices and benchmarks Accounts Savings Payable Calculator Agency action plan Review Examples of Cost Savings Identified (1) Inconsistent card use at a large government agency resulted in missed refund opportunities. Agency implemented bank recommendations: Reduced check spend by migration to card spend

Increased spend from approximately $1M to more than $40M in 5 years (2) State/local government entity had gaps in card use and manual payment mechanisms: Increased card usage by more than 100% Realized more than $1M in cost savings annually 11 Savings Calculator Accounts Payable Review GSA SmartPay 2 Innovative Solutions

The GSA SmartPay 2 Master Contract includes traditional magnetic stripe charge card solutions, but also a broad range of innovative carded and non-carded solutions that can improve security, control, and transparency, and increase refunds earned. Examples of Innovative Solutions Single Use Accounts Users have access to a virtual account number for use during a specific time period, for a limited dollar amount, and/or for a specific vendor Accounts activated in real time Disposable, one-time use account numbers may reduce the risk of fraud and abuse Reduces the need for convenience checks Increased oversight of spend Seamless reconciliation

12 Examples of Innovative Solutions Stored Value Cards Customers can use a single value load or card can be reloaded with a specified amount on a recurring basis 13 Immediate fund availability and flexibility PIN number can be assigned for ATM withdrawals Enhanced internal controls No credit check required Cardholder has online access to review balance and

transaction history Examples of Innovative Solutions Declining Balance Cards Functions similarly to traditional plastic charge cards, however spending limits can be set to not refresh monthly 14 Financial flexibility and security Reduction of administrative fees Option for employees who cannot be issued a charge card Safe alternative to cash and paper checks

Examples of Innovative Solutions Electronic Invoice Presentment and Payment Manage an entire invoice and payment cycle online, eliminating the need for cumbersome processes associated with paper-based systems Increased visibility and control over invoice tracking Ability to pay merchants that traditionally do not accept carded payments for high dollar transactions Improved cash-flow visibility and accelerated payment settlement Reduces number of late payments 15 Innovative Solutions in Action Transit Subsidies

Utilities Payment Grants Payment Innovative Applications Use Case Transit Subsidy Programs The Department of Health and Human Services administers the Go!card through the GSA SmartPay 2 Master Contract. Benefits include:

16 Limited to transit provider MCC code Automated and reloadable fare media Increased internal controls and accountability Participants only spend what is needed monthly Use or lose monthly benefit for better spend control Reduce paper use Innovative Applications Use Case Utilities Payment GSA SmartPay Program solutions may be used for payments to utility companies. For instance, through its Payment Card program, the Department of State pays utility bills with a GSA SmartPay solution. Benefits include: Potential to earn refunds on a recurring expense Increase level of data available to help track energy use and expenditures

Identify high energy usage programs and helps facilities and operations identify potential issues 17 Utilities Payment Innovative Applications Use Case Grants Payment Solutions OCCM is working with potential customer agencies to develop and test a GSA SmartPay grants payment solution, which could result in: Increased refunds based on increased volume Enhanced ability to track grant activity, helping to mitigate fraud, abuse, and erroneous payments Increased internal controls such as MCC blocking Streamlined grants payment processes to reduce administrative processing costs

18 Grants Payment Where Can My Agency Start? Purchase Travel Fleet The Purchase Card and the Federal Acquisition Regulation In accordance with the Federal Acquisition Regulation (FAR), agency procedures should not limit the use of

the Purchase Card to micro-purchases. Rather, agency procedures should encourage the use of the Purchase Card in greater dollar amounts by contracting officers to place orders and to pay for purchases against contracts under part 8 procedures when authorized, and to place orders and/or make payment under other contractual instruments, when agreed to by the contractor (FAR Part 13.301). Purchase 19 Making Contract Payments with GSA SmartPay Tools such as an A/P File Review and/or the GSA SmartPay Savings Calculator can help identify areas to migrate spend to maximize cost savings and refunds Review how your agency pays against existing contracts and

spend through those contracts Review your agencys policies on payments against contracts Purchase 20 Using GSA SmartPay for Federal Strategic Sourcing OMB established the Federal Strategic Sourcing Initiative (FSSI) Governance Council and anticipates that there will be additional strategic sourcing opportunities available in the near future Review payments made outside of FSSI contracts that could be moved to an FSSI vehicle (could be determined with an A/ P File Review) Determine additional potential savings, refunds, and point of sale discounts that could be received by moving to FSSI vehicles

Utilize FSSI Implementation Kit Purchase 21 Improving Travel Card Use and Compliance Improving GSA SmartPay Travel Card use when employees travel could be an effective way to increase refunds earned and improve enhance internal controls A/OPCs should develop a plan for enforcing travel card use policies within agencies Local Travel: The SmartPay Master Contact and FTR Regulations allow for the use of SmartPay travel card on local travel; permitting such use is at agency HQ discretion. What are some of your agencys best practices?

Travel 22 Innovative Uses for GSA SmartPay Fleet GSA SmartPay solutions can be designed to streamline Fleet payment processes and enhance data collection. Solutions include but are not limited to: GPS/Telematics: GPS technology used to associate transactions to GPS coordinates for increased transparency to help mitigate fraud and abuse Fuel Advisors: Designed to help bulk fuel purchasers find best available prices based on unique consumption patterns and low cost sources Corporate Payment Solutions: Designed to help pay for services outside of traditional fleet transactions, including short term car rentals Fleet

23 Where is the Market Going? ePayables Tools and Services Data Mining and Enhanced Data Expanding Use of Commercial Payments Additional Information for Innovative Solutions There are a number of available resources for agencies to explore increased use of GSA SmartPay solutions to help address agency payment challenges.

GSA SmartPay Saves communications campaign and website Innovative solutions brochures Contractor banks resources, including brochures and/or classes 24 Suggested Classes from the GSA Office of Charge Card Management 25

GSA SmartPay Program Update Use of Data Analytics for Effective Program Oversight GSA SmartPay 2 Master Contract Basics GSA SmartPay Purchase Management Essentials GSA SmartPay Travel Management Essentials GSA Fleet Card Frequently Asked Questions GSA SmartPay Online Tools GSA SmartPay Points of Contact Andrew Y. Lee Office of Charge Card Management Service Delivery Division [email protected] (202) 765-6772 GSA SmartPay Customer Support Center (703) 605-2808 [email protected]

GSA SmartPay Bank Contact Information https://smartpay.gsa.gov/content/contact#a1 Questions? GSA Starmark Logo

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