United States Department of Agriculture Office of Procurement

United States Department of Agriculture Office of Procurement and Property Management A-123 USDA Required Process & Procedures for A– 123 Compliance 2010 GSA Smart. Pay® Conference Wednesday August 11, 2010 3: 30 - 4: 40 pm Building B, Room B 308, Georgia World Congress Center

Agenda v A-123 Overview § A-123 Background § Required Training § USDA A-123 Audit & the CCSC v Process & Procedures § New Card Requests § Hierarchy Requests v Reports § USDA Database Account Set-up Report § System User Report § Coordinator – AO’s Hierarchy Exception Report v Correcting Processing/Reporting Hierarchies in AXOL 2 USDA Charge Card Service Center

A-123 Overview v A-123 Overview § Office of Management and Budget (OMB) Circular A-123 Background OMB Circular A-123, Appendix B, establishes guidance for Executive branch agencies for improving the management of government charge card programs. The requirements in OMB Circular A-123, Appendix B pertain to the use of charge card programs by agencies and their employees and must be included in internal agency regulations, procedures, and training materials. § Training § Purchase Card Reporting & Policy Training must be completed by ALL Coordinators by March 2011. USDA A-123 Audit & the CCSC The CCSC has maintained a centralized cardholder account setup and hierarchy setup system since October 1, 2009, in response to a request made by the CFO after an A-123 audit. The purpose of the centralization is to strengthen the internal controls involving card request and set-up after the existing process was found to be deficient. 3 USDA Charge Card Service Center

A-123 Overview § USDA A-123 Audit & the CCSC, continued… As a result, the CCSC responsibilities are to: • Run the Coordinators-AOs Hierarchy Exception Report monthly to identify all APCs/LAPCs/AOs that are also cardholders and to identify if or when their card is setup in the hierarchy that they oversee as Coordinators/AOs and forward the information to the APC. The APC should remove the APC/LAPC/AO card account from the hierarchy that they maintain or request a new hierarchy for the card account. • Assume the responsibility of processing new card requests, new hierarchy setups, and existing hierarchy maintenance requests from the agencies. New card requests and new hierarchy set-ups can only be initiated through the CCSC by emailing the requests to ccsc@dm. usda. gov. • Prevent at-risk card from being issued. At-risk cards are cards where separation of duties are not in place and the APC/LAPC/AO is able to maintain their own card (e. g. increase their authorization limits, final approve their own transactions). Ø Any new card requests or new hierarchy setup requests submitted to the CCSC that are deemed as “at-risk” will be rejected by the CCSC and returned to the appropriate individual to make the necessary changes and resubmit. 4 USDA Charge Card Service Center

Process & Procedures Purchase Card & Hierarchy Requests New Card & Hierarchy Requests via AXOL New Card & Hierarchy Requests via CCSC § New card requests setup in AXOL ensures accuracy only on the values entered in the required fields. AXOL does not have functionality to validate information from online submissions across the board, particularly on cardholders that perform dual roles. § New card requests submitted to the CCSC are automatically rejected if the hierarchy for the card request is the same as the hierarchy that the cardholder maintains in their role as APC/LAPC/AO. § Card requests submitted to the CCSC ensure § Because the system does not perform dual accuracy on all values entered in all fields role validation for new card requests made (required or non-required), including the DAC, online, the number of cardholders set up in the other roles, and the hierarchy. same hierarchy that they maintain would § The CCSC ensures tracking of all requests by increase once again, and potentially even date and maintains the record of the requestor double the amount of incorrect hierarchies and a signed copy of the request form for audit found this past January 2010, when the CCSC purposes. began running the Coordinators-AOs Hierarchy Exception Report. § AXOL does not have an online functionality for new hierarchy setups. 5 USDA Charge Card Service Center

Process & Procedures Coordinators-AOs Hierarchy Exceptions Date # APCs/LAPCs Set-up in Hierarchies that they maintain # AOs Set-up in Hierarchies that they maintain Coordinators/AOs Total Hierarchies that they maintain 1/4/10 18 110 118 2/15/10 8 62 70 3/15/10 3 25 28 4/15/10 4 9 13 5/15/10 8 24 32 6/15/10 5 18 23 7/15/10 0 8 8 % Decrease in Compromised Hierarchies* From 118 to 8 = 96% * Total number of open cards as of 7/15/10 = 17, 563 * Decrease due to quality check performed by the CCSC on hierarchy setups and maintenance requests. 6 USDA Charge Card Service Center

Process & Procedures Purchase Card Request Process Online Requests via AXOL without validation of set-up accuracy or oversight for fraud Coordinators complete card request form AO reviews & signs completed form and sends it to the LAPC enters the information in AXOL processes request (validation only on required fields) US Bank QA group processes the card request entered online and creates and ships the card to the cardholder address Requests via CCSC AXOL with validation of set-up accuracy or oversight for fraud Coordinators complete card request form 7 AO reviews & signs completed form and sends it to the LAPC scans the form and emails it to the CCSC for processing CCSC confirms accuracy in accounting & hierarchy (validation for both required & non-required fields) USDA Charge Card Service Center The CCSC processes the card requests confirmed for accuracy & submits the spreadsheet of requests to US Bank twice a week (Mondays & Wednesdays) for processing

Process & Procedures Purchase Card & Hierarchy Request Processes § Card requests submitted via the CCSC undergo a quality check for accuracy in the default accounting code and hierarchy assignments to prevent risks associated with: Ø Cardholders performing dual roles (Coordinators & AOs) being set up in the hierarchy they maintain, cardholders being set up in hierarchy that do not exist or hierarchy not associated with their AO Ø Card accounts set up with invalid Default Accounting Codes (DACs) • Risk of rejected transactions in FFIS/FMMI causing account suspension for all cards under that managing account due to delinquency • Risk of interest accrual after 30 days § The quality check performed by the CCSC increases the turn-around of card requests by an average of 5 days Ø AXOL processing without quality check is 7 -10 business days to receive the card Ø CCSC processing with quality check is 12 -15 business days to receive the card (US Bank has agreed to USDA submitting card requests twice per week vs. once a week. The extra day reduced the processing days from the previous 18 -21 business days time frame to receive the card. ) § In the long-term, the short delay in the CCSC card request processing assists in the prevention of larger issues with: Ø Fraudulent account requests Ø Incorrect hierarchy set-ups Ø Invalid DACs 8 USDA Charge Card Service Center

Processes & Procedures Purchase Card & Hierarchy Request Processes § There is no cost impact to agencies to submit the card requests or hierarchy requests to the CCSC. § There is no delay in hierarchy setup requests as the same form that is faxed to the bank in the past is the same form that is used to process the request by the CCSC. Ø The hierarchy setup/maintenance requests is submitted to the bank twice per week (Tuesdays & Thursdays) and the turnaround is the same 3 -5 business days as it is when faxed directly to the bank. Ø No additional days have been added to the hierarchy requests. § No confirmation of accept/reject status is sent to the requestor when the form is faxed directly to US Bank. All requests submitted to the CCSC automatically receive an initial confirmation of receipt with a notification of rejection/approval and a second confirmation when the set-up/maintenance is completed. Hierarchy Requests faxed directly to US Bank • No notification/confirmation of whether or not the hierarchy form was rejected or accepted and processed. • If the Coordinator did not find the hierarchy in the system within a week or two, they would have to fax the form again and again or contact the Program Coordinator to inquire about the request. 9 Hierarchy Requests via the CCSC • The CCSC sends a notification of approval and submission to the bank, or a rejection notice with a detailed explanation of what needs to be corrected and resubmit. • When the hierarchy set-up is completed by US Bank, the CCSC sends the requestor a second notification informing him/her that the hierarchy is now setup online to link the cardholder. USDA Charge Card Service Center

Processes & Procedures Rejected Purchase Card Requests Transactions will not be sent to FFIS/FMMI for payment unless the accounting is valid. If the DAC is invalid and posted to the transaction, but the cardholder re-allocates the transaction to a valid accounting, then the transaction will be forwarded to FFIS/FMMI for payment. However, subsequent transactions will not be forwarded to FFIS/FMMI for payment until the DAC is corrected or the transaction accounting is reallocated. It is imperative that the DAC submitted with new card requests is accurate to prevent the risk and hassle of all accounts under a managing account getting suspended and transactions accruing interest after 30 days. Ø From October 1, 2009 to July 16, 2010, the total number of Purchase cards submitted to the CCSC was 1924 and the number of rejected by the CCSC was 738. Since centralization of the Purchase Card request process, the CCSC was able to flag 38% of the card requests submitted for errors such as invalid accounting and invalid hierarchy values. Ø The quality check by the CCSC for valid accounting and hierarchy values prevents the risk of new cards being issued by US Bank with invalid accounting which would prevent payments on transactions made on the account leading to suspension of the newly issued account, as well as preventing cards from being setup in the same hierarchy that they maintain as the APC/LAPC/AO. 10 Period Dates # Purchase Cards Requested via the CCSC # Purchase Cards Requests Rejected by CCSC % of Card Requests Rejected 10/1/09 to 12/31/09 384 148 38% 1/1/10 to 7/16/10 1540 590 38% Total 1924 738 38% USDA Charge Card Service Center

Processes & Procedures New Cardholder Request for Purchase Card Form § The completed Cardholder Request for Purchase Card form must meet the following requirements, to prevent the request from being rejected by the CCSC: • The name entered in the ‘Name’ field must match the applicant’s name on record with the USDA’s HR department • The form must be signed by both the cardholder and the AO certifying that each of them has completed the training, understands the regulations, and knows the consequences of inappropriate actions. A copy of the training certificates should be attached. • The “Line of Accounting” must be a valid value. To ensure accuracy, it should be copied directly from AXOL and pasted into the ‘Accounting Segments’ field of the form, • The processing and reporting hierarchy must be valid. If the cardholder is also a Coordinator and/or Approving Official, the hierarchy listed on the Cardholder Request for Purchase Card form cannot match the hierarchy that they maintain as the APC/LAPC/AO. § As of Monday, August 16, 2010, any Cardholder Request for Purchase Card form submitted to the CCSC in the old form, will be rejected. 11 USDA Charge Card Service Center

Processes & Procedures New Cardholder Request for Purchase Card Form 12 USDA Charge Card Service Center

Reports v Reports § USDA Database Account Set-up Report • This is a custom report produced by the CCSC to directly meet the needs of A-123 reporting and compliance monitoring. It allows the APCs to see the hierarchy position of the cardholder accounts in comparison to the Approver access and the individuals who have authority over TSYS changes. This report is used: Ø To certify that Coordinators and Approving Officials (AOs) have been correctly set up in their own hierarchies and are not managing their own account Ø To ensure that cardholders are set up under their correct AO Ø By APCs to take corrective action on the information loaded in TSYS • Compilation of the following reports: Ø Ø • 13 System User List Account List TSYS Point of Contact (from US Bank) TSYS Hierarchy Set-ups (from US Bank) Custom report is generated by the CCSC and distributed to APCs monthly via a Microsoft Office Live Workspace on the 15 th of every month. USDA Charge Card Service Center

Reports USDA Database Account Set-up Report Example CORRECT HIERARCHY: Frank Hodo as the APC/LAPC and the TSYS POC. There is no AXOL or TSYS AO listed and no cardholders. Since there are no cardholders in this hierarchy, no TSYS AO or AXOL AO is required. 14 USDA Charge Card Service Center

Reports USDA Database Account Set-up Report Example INCORRECT HIERARCHY: John Mc. Cain is listed as both the TSYS POC and TSYS AO, while Frank Hodo is listed as the LAPC and AXOL AO. This is incorrect and means either 1) John Mc. Cain needs to be added in AXOL as the AO or 2) that Frank Hodo needs to be added as the correct person in TSYS as the AO, and the POC Maintenance form needs to be submitted to remove John Mc. Cain as the TSYS AO. The TSYS POC will be determined by the APC/LAPC. 15 USDA Charge Card Service Center

Reports USDA Database Account Set-up Report Example CORRECT HIERARCHY: This is an example of the hierarchy being set up correctly at the TSYS POC, AXOL AO, and the TSYS AO. This also illustrates properly how the hierarchy should look with cardholders attached. Frank Hodo is the TSYS POC, TSYS AO, and AXOL AO for all cardholder’s listed in this division. AXOL and TSYS AO’s ideally should always match up as they do here. 16 USDA Charge Card Service Center

Reports USDA Database Account Set-up Report Example INCORRECT HIERARCHY: This is another example of the hierarchy being set up incorrectly. Frank Hodo may not have his card in the Company listed here (16903) because he is the LAPC of this company and would be able to maintain his card. Should Frank Hodo only be an AO in a different Division (e. g. 00001), then he could actually have his card in the Division listed here (i. e. , 00003). To correct this hierarchy, Frank Hodo must have his card set up in a different Agent/Company where he does not have span of control as APC/LAPC. 17 USDA Charge Card Service Center

Reports v Reports, continued… § System User List Report • The System User List Report identifies AXOL user ids and log in information including when the User ID was created and by whom, the date it was last maintained, and the processing and reporting hierarchy positions as they are set up in AXOL. The System User List Report is used to create the following reports: Ø Coordinator-AOs Hierarchy Exception Report Ø System User List for AXOL User IDs Ø Database Account Setup Report § Coordinator – AOs Hierarchy Exception Report • Custom Report is generated by the CCSC and distributed to APCs on the 15 th of every month. • This report consists of a compilation of the Account List report and the System User List report to determine whether or not APCs, LAPCs or AOs that are also cardholders, have control over their own card account. 18 USDA Charge Card Service Center

Correcting Processing/Reporting Hierarchies in AXOL Coordinators/AOs Hierarchy Exception Report The report shown below is a sample of the Coordinators/AOs Exception report generated by the CCSC and distributed to the A-123 Committee and the APCs on the 15 th of every month: 19 USDA Charge Card Service Center

Correcting Processing/Reporting Hierarchies in AXOL In AXOL, you will be required to either go into: Option 1 – for user roles of APC, LAPC and/or AO Ø AXOL System Administration Ø User Profile Ø Access the Processing/Reporting hierarchy links Ø Add/change/remove the hierarchy listed Or Option 2 – for cardholder role Ø Go into Account Administration Ø Maintain Cardholder Account Ø Access the Account Information and perform a hierarchy transfer on the cardholder account to change the hierarchy for the card If the Processing/Reporting hierarchies listed in the User Profile are correct for the user role(s) of APC, LAPC and/or AO, then his/her Purchase card account must be moved to the appropriate hierarchy of his/her AO. If the Processing/Reporting hierarchy is not correct for the user role(s) of APC, LAPC and/or AO, then a new hierarchy request must be submitted to the CCSC. 20 USDA Charge Card Service Center

Correcting Processing/Reporting Hierarchies in AXOL The following steps must be followed to obtain a new hierarchy for the cardholder account: 1) The Coordinator (APC or LAPC) will submit a new hierarchy request for the cardholder’s AO (levels 6 and/or 7) to the CCSC. 2) The CCSC will process the request to ensure that the AO hierarchy level(s) value(s) are correct and will sent an email to the Coordinator confirming that the request was either accepted or rejected. 3) If rejected, the request will be returned to the Coordinator to make the necessary changes and re-submit to the CCSC. 4) If accepted, the CCSC will submit the request to US Bank and send a notification of completion back to the Coordinator when the hierarchy is set up. The Coordinator (APC or LAPC) will go into AXOL and perform the hierarchy transfer on the cardholder account from the old hierarchy to the newly created hierarchy (in steps 1 -4). NOTE: Hierarchy transfers performed in AXOL are not updated until the end of the cycle (i. e. , 7 th of every month). If the update is required sooner, Coordinators are to submit the Cardholder Maintenance for the hierarchy change to US Bank via fax. 21 USDA Charge Card Service Center

Questions 22 USDA Charge Card Service Center

United States Department of Agriculture Office of Procurement and Property Management Additional information on the Charge Card Service Center including News, Notices, POC Lists, Guides & Reference Material, Training Information, etc… can be accessed at http: //www. dm. usda. gov/procurement/ccsc/.