U S General Services Administration Purchase Management Essentials

U. S. General Services Administration Purchase Management Essentials 2017 GSA Smart. Pay® Training Forum August 1 -3, 2017 Phoenix, AZ

Agenda • GSA Smart. Pay® Program Statistics • Benefits of Using the GSA Smart. Pay® Purchase Card • What is a Micro-Purchase? • Purchase vs Payment Mechanism • Required Sources • Split Purchases • Taxes and Surcharges • Roles and Responsibilities • Fraud and Preventative Measures • A/OPC Resources

GSA Smart. Pay FY 16 Program Statistics Transactions Spend Accounts Fleet: $1. 3 B 47% Travel 31% Fleet Travel: $8. 1 B Purchase: $19. 1 B 22% Purchase: 289 K Travel: 2. 49 M Fleet: 550 K Total Transactions 91. 7 Million Total Spend: $28. 5 Billion Total Accounts 3. 3 Million $67. 8 Million $290 Million $460 Billion spend increase compared to FY 15. in refunds back to support agencies' missions in FY 16. in Program spend sinception in FY 1999.

Benefits of Purchase Card Use Cost Savings Refunds Realized Transparency Integrated with GSA Advantage! Electronic Data Automatic Safety Access POS Discount Recognition

o r ic p ur se a ch What is a Micro-Purchase? M “Micro-purchase” is the preferred method for the acquisition of supplies and/or services with an aggregate total that does not exceed the micro-purchase threshold. The Micro-Purchase Threshold (MPT) is $3, 500*.

Exceptions to the Micro-Purchase Threshold Type Services Construction Contingency Operations Definition Directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task Construction, alteration, or repair (to include painting) of buildings, structures, or other real property and includes improvements of all types. Support of a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack Micro-Purchase Threshold $2, 500 $2, 000 $20, 000 inside the U. S. $30, 000 outside the U. S

National Defense Authorization Act (NDAA) for FY 2017 (S. 2943) dated 12/23/2016 Entity MPT Threshold Do. D Activities $ 5, 000 (10 USC § 2338) Do. D Basic Research Programs $10, 000 (10 USC § 2339) Do. D Science and Technology Laboratories $10, 000 (10 USC § 2339) Contracts between the Government and Universities, Independent Research Institutes, and Nonprofit Research Organizations (under 31 USC 6303 – 6305) $10, 000, or such higher threshold as determined appropriate by the head of the relevant executive agency (10 USC § 2338)

Procurement vs Payment Mechanism FAR Subpart 13. 301 Micro-Purchase Threshold (MPT) Equal or less than MPT Over MPT Who All Cardholders Cardholder who is also either a Contracting Officer or Ordering Officer Procureme nt Orderin g* Paymen t X X X * Orders against existing contracts and only if authorized in the basic contract, Basic Ordering Agreement (BOA), or Blanket Purchase Agreement (BPA). Funds certification is required prior to making the purchase. Transactions over the micro-purchase threshold must comply with applicable Federal procurement laws, regulations, and agency policies.

Required Sources FAR Subpart 8. 002(a)(1) & (2) (Listed in Order of Priority) Sources Supplies Inventories of the requiring agency X Excess from other agencies X UNICOR (Federal Prison Industries (FPI)) www. unicor. gov X Ability. One (includes NIB / Source. America) -- Items and services found on the Procurement List www. abilityone. gov X Wholesale supply sources, such as stock programs of GSA, DLA, VA X Commercial Sources X Services X X

What is Splitting a Purchase? Dividing a single transaction into two or more smaller transactions to stay under the MPT or within a Cardholder’s single transaction limit. EXAMPLE: Peggy C. Cardholder is asked to purchase a video projector costing $4, 000 with her card. The MPT for supplies is $3, 500, the same as Peggy’s single transaction limit. Peggy calls XYZPDQ Office Supplies and asks that they charge her card $2, 000 today and $2, 000 tomorrow for a total of $4, 000 and orders the projector.

Tax Exemption and Surcharges Smart. Pay® (SP) Bulletins 17 and 20 Tax Exemption Purchase Card transactions are exempt from sales taxes in all 50 states and U. S. territories. Surcharges May be assessed by a retailor and added to the cost of a purchase Tax exemption forms needed: Several states do not allow or limit use of surcharges: Florida Georgia Louisiana Michigan Minnesota Rhode Island California Colorado Connecticut South Dakota Tennessee Texas Florida Kansas Maine Oklahoma Texas Utah West Virginia Wisconsin Wyoming Visit smartpay. gsa. gov and click on the Smart. Tax icon for more information Surcharges should be disclosed in advance and itemized on the receipt

A/OPC Roles and Responsibilities • • Set up accounts and designating authorization controls Liaison between account holders and contractor bank Advice and assistance to account holders Audit accounts as required by agency policy Establish guidelines for the agency / account holders Administer training Use the bank’s Electronic Access System (EAS) for account management and oversight • Take action on delinquent accounts • Monitor and report fraud and misuse within the program

Approving Official (AO) Roles and Responsibilities • Ensure all charges are proper, meet agency needs, and are reconciled in a timely manner. • Assist in the resolution of questionable charges • Approve monthly billing statement • Conduct independent reviews of account holder transactions • Ensure proper recordkeeping

Account Holder Roles and Responsibilities • Secure the payment solution (card, PIN, account number) • Maintain records for all transactions • Use the account ethically and only for official government purchases • Understand agency policies / procedures for use of the card and the terms of the account holder agreement • Immediately report a lost, stolen, or compromised account information • Monitor and track transactions and perform timely reconciliation • Dispute transactions timely and in accordance with agency and bank policies • Pay only for expenses that fall under the purchase card solution (do not use for Travel or Fleet purchases)

Categories of Fraud Cardholder Directly by the Cardholder themselves Non-Cardholder Merchant By third party without knowledge or consent of the cardholder • Never received • Lost / stolen • Counterfeit • Identity theft Directly by merchant with or without knowledge or consent of the Cardholder • False charges • Mischarges • Bribes / gratuities

What would you do? Robert is short on cash this month. He uses his GSA Smart. Pay® Purchase Card to pay his personal expenses. Robert plans to make a payment on his purchase card account in a few days after he gets paid. • • In her monthly review, Donna (the A/OPC) finds charges against Robert’s account to vendors that aren’t part of his typical purchasing patterns. • What should Donna do? • • Collect Information Report to the Proper Agency Official Contact the Agency Inspector General (IG) Suspend or Deactivate Account Refresher Training Notify the Approving Official and Supervisor Notify Human Resources

Preventative Measures • Program Evaluations Ø Compliance Ø Training Ø Records Retention Ø Integrity of Purchase Ø Receipt and Process Acceptance Ø Delegation of Authority • Reports Ø Account Activity Ø Declined Authorization Ø Disputes Ø Unusual Spending Activity Ø Lost / Stolen Card Ø Ad Hoc • Internal Policies Ø Separation of Duties Ø Credit Limits Ø Random Records Reviews Ø Training Ø Merchant Code Blocks Ø Audits / Investigations

GSA Smart. Pay® Online Training https: //smartpay. gsa. gov Free online purchase card training for cardholders and A/OPCs: • Set up a profile, register, and manage online training courses and certificates • Level 1 A/OPCs can run training reports and search for cardholders within their agencies

Resources for Program Coordinators More Sessions at the GSA Smart. Pay® Forum • • Use of Data Analytics for Effective Program Oversight GSA Smart. Pay 2 Master Contract Basics GSA Smart. Pay® Program Update GSA Smart. Pay® Travel Management Essentials GSA Smart. Pay® Online Tools Smart. Pay® Saves: Innovative Payment Solutions GSA Smart. Tax GSA Smart. Pay® SP 3 Transition Training

Audience Questions

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