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Indian Health Service The Federal Health Program for American Indians and Alaska Natives


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Part 5 - Management Services

Chapter 23 - Government-Wide
Commercial Purchasing Card

Title Section
Introduction 5-23.1
    Purpose 5-23.1A
    Background 5-23.1B
    Policy 5-23.1C
    Authority 5-23.1D
Responsibilities 5-23.2
    Organizational Framework 5-23.2A
    Responsibilities 5-23.2B
Procedures 5-23.3
    Cardholder Eligibility 5-23.3A
    Approving Official Eligibility 5-23.3B
    Exceptions 5-23.3C
    Training 5-23.3D
    New Cardholder Setup 5-23.3E
    New Approving Official Setup 5-23.3F
    Refresher Training 5-23.3G
Cardholder Purchasing Procedures 5-23.4
Purchase Card Procedure 5-23.5
    Purchase Card Request Form 5-23.5A
    Completed Request Form 5-23.5B
    Pick-up Supplies 5-23.5C
    Premium or Additional Charge 5-23.5D
    Receiving 5-23.5E
    Log 5-23.5F
    Exceed Micro Purchase Limit 5-23.5G
    Modifying an Approved Purchase Card Form 5-23.5H
    Spending Limits 5-23.5I
    Changing Account Limits (One-time Basis) 5-23.5J
    Guidance on Specific Purchases 5-23.5K
    Unauthorized Use of the GCPC 5-23.5L
    Authorized Single Purchase Limit 5-23.5M
    Service Contracts 5-23.5N
    Federal/Departmental/IHS Requirements 5-23.5O
    Fund Control 5-23.5P
    Security of the GCPC 5-23.5Q
Convenience Checks 5-23.6
    Conveinience Check Use 5-23.6A
    Use of Conveinience Checks 5-23.6B
    Check Register 5-23.6C
    Exceeding Single Purchase 5-23.6D
    Conveinience Check Fees 5-23.6E
    Check Authority and Responsibilities 5-23.6F
    Conveinience Check Register 5-23.6G
    Reconciliation of Convenience Checking Account 5-23.6H
    Safeguarding and Accounting for Blank Convenience Checks 5-23.6I
    Termination 5-23.6J
    Security of the Convenience Checks 5-23.6K
    Safeguard Unused Convenience Checks 5-23.6L
Procedures after Purchase and Reconcilliation 5-23.7
    Disputes 5-23.7A
    Separate Agreement Charges 5-23.7B
    Sales Tax 5-23.7C
Record Keeping 5-23.8
    Fiscal Data 5-23.8A
    Record-keeping and Retention 5-23.8B
    Convenience Checks Purchase Files 5-23.8C
Lost or Stolen Procedures 5-23.9
    Lost or Stolen Cards 5-23.9A
    Lost or Stolen Convenience Checks 5-23.9B
    Electronic Theft 5-23.9C
Termination Procedures 5-23.10
    Administrative Changes in Cardholder Status 5-23.10A
    Administrative Changes in Approving Official Status 5-23.10B
    Ratifications 5-23.10C
Incorrect Use, Unauthroized Use, Fraud and Misuse 5-23.11
    Unauthorized Use 5-23.11B
    Fraud and Misuse 5-23.11C

5-23.1  INTRODUCTION

  1. Purpose.  This chapter revises and updates the policy, procedures, and responsibilities for the Indian Health Service (IHS) Purchase Card program.

  2. Background.  There are several types of charge cards authorized for use by Federal agencies to reduce transaction costs and administrative burden for certain categories of requirements.  The IHS uses Travel Cards for travel and transportation expenses by authorized individuals on official business and uses the Government-wide Commercial Purchase Card (GCPC) for purchase of goods and services by individuals with delegated acquisition authority.  Travel card policies and procedures are described in Part 5, Chapter 8, "Travel," Indian Health Manual (IHM). This chapter is applicable to the GCPC and is the sole GCPC policy for the IHS.  No Area Office or Service Unit supplemental policies shall be used in lieu of this policy.

  3. Policy.  The IHS will use the GCPC for micro-purchases and other transactions authorized by regulation to the maximum extent consistent with the requirements and limitations of IHS accounting and property management procedures.

  4. Authorities.

    1. Department of Health and Human Services (HHS) Purchase Card Program Guide

    2. Federal Acquisition Regulation (FAR), 48 Code of Federal Regulations (CFR), Chapter 1

    3. HHS Acquisition Regulation, 48 CFR Chapter 3 (HHSAR)

    4. Office of Management and Budget (OMB) Circular A-123 Appendix B.

5-23.2  RESPONSIBILITIES

  1. Organizational Framework.  The organizational framework of the program uses the servicing bank hierarchy system for account management as described in the HHS Purchase Card Program Guide.   The IHS account management hierarchy is as follows:

    1. Level 1 - General Services Administration.  The General Services Administration (GSA) awarded and administers the contracts with the servicing banks and has oversight of the GCPC across the Federal Government.

    2. Level 2 - HHS.  The HHS.

    3. Level 3 - IHS.  The HHS Operating Division - IHS.

    4. Level 4.  The Area Office or the Division of Engineering Services contracting office.

    5. Level 5.  The Approving Official (AO).

    6. Level 6.  The Cardholder (CH).

  2. Responsibilities.

    1. Director, IHS.  The Director, IHS, is administratively responsible for providing overall guidance and direction for the IHS Purchase Card Program and evaluating the program's effectiveness on a continuing basis.

    2. Area Director.  The Area Director is responsible for ensuring compliance with the requirements of the IHS Purchase Card Program by Area management officials at all levels and by Area personnel who are concerned with the identification of requirements, fund certification, ordering of goods and services, receipts, accounting for property when applicable, and reconciliation of payments.

    3. Office Directors.  Headquarters Office Directors are responsible for ensuring compliance with the requirements of the IHS Purchase Card Program by management officials at all levels and by Headquarters personnel who are concerned with the identification of requirements, fund certification, ordering of goods and services, receipts, accounting for property when applicable and reconciliation of payments.

    4. Agency/Organization Program Coordinator.  The Agency/Organization Program Coordinator (A/OPC) is responsible for implementing the HHS Purchase Card Program for the IHS.  The specific duties of the A/OPC are described in the HHS Purchase Card Program Guide.

    5. Agency Program Coordinator.  The Chief Contracting Officer (CCO) at each IHS Area Office or Division of Engineering Services contracting office is a Level 4 Agency Program Coordinator (APC).  The CCO can choose to nominate a qualified subordinate to be Level 4 APC, subject to approval by the Level 3 A/OPC.  The APC is responsible for:

      1. Issuing Delegation of Procurement Authority (DPA) up to the micro-purchase threshold.

      2. Arranging for training of AOs and CHs.

      3. Approving requests for AO and CH accounts.

      4. Monitoring card usage.

      5. Suspending or terminating accounts.

      6. Reporting.

    6. Approving Official.  The AO is responsible for day to day oversight of one or more CHs to ensure that each and every transaction is appropriate, legal and properly documented.  The specific responsibilities of the AO are further described in the HHS Purchase Card Program Guide.

    7. Cardholder.  The CH is responsible for making purchases after obtaining the necessary approvals, following the required source selection procedures, documenting the receipt and disposition of the goods or services purchased, and reconciling all completed transactions in a timely manner.  The CH specific responsibilities are further described in the HHS Purchase Card Program Guide.

    8. Head of the Contracting Activity.  The Director, Division of Acquisition Policy (DAP), is the Head of the Contracting Activity (HCA).  The HCA has the delegated authority to manage the IHS GCPC business line.  The HCA is the A/OPC unless the HCA delegates that responsibility in writing to another official.

    9. Billing Official.  The Director, Office of Finance and Accounting, is the Billing Official for Headquarters CHs, including those in the Division of Engineering Services.  The Area Office Financial Management Officer (FMO) is the Billing Official for Area Office CHs and is responsible for:

      1. Receiving and paying invoices from the servicing bank and recording transactions in the financial system.

      2. Issuing the Internal Revenue Service (IRS) form 1099, pursuant to 26 United States Code (U.S.C.) § 6041 and § 6041A and as implemented in 26 CFR (in part).  Government agencies as payors are required to report on the IRS form 1099 all payments over $600 made to contractors by convenience check within a calendar year.  The 26 U.S.C. § 6109 requires each contractor to provide its Taxpayer Identification Number for use on form 1099.  The IHS Area FMO or the IHS HQ FMO is responsible for submitting the form 1099 to the IRS.

    10. Disputes Official.  The Level 4 APC serves as the Disputes Official responsible for providing guidance to CHs regarding disputed transactions.  The APC may elevate disputes to the A/OPC as necessary.

5-23.3  PROCEDURES

  1. Cardholder Eligibility.  New CH accounts may be established only after verification by the APC that a valid business need exists.  To qualify for a purchase card, the prospective CH must:

    1. Be an IHS employee.  Personal Services contractors are not IHS employees for the purpose of this policy.

    2. Training.  Must have completed the prescribed training.

    3. Delegation of Authority.  Must have a DPA.

  2. Approving Official Eligibility.  To qualify as an AO, an individual must be an IHS employee and complete the appropriate level of training specified in the HHS Purchase Card Program Guide for the dollar amounts involved.  The APC should consider the organizational relationship between the AO and the CH(s) and the number of CHs assigned to a single AO when making appointments.  The goal is to maximize internal control and avoid imposing an administrative burden that could compromise the level of oversight.  The AO should be an equivalent or higher grade than the CH, should be conveniently located for physical access to the CH's transaction files, and should be in a position where the AO is typically not the requestor or user of the goods or services being purchased.  The number of CHs managed by a single AO should not exceed five.  When staffing limitations or other circumstances require deviating from this policy, the APC shall identify a risk mitigation strategy such as increased frequency of higher level review, increased AO reporting, or periodic reviews by another AO.

  3. Exceptions.  Each office requesting an exception must do so in writing to the APC or to the A/OPC.

  4. Training.  The A/OPC may require training for CHs and AOs in addition to the minimum training specified in the HHS Purchase Card Program Guide as necessary to respond to acquisition initiatives and special requirements.

  5. New Cardholder Setup.

    1. Completed Training.  After completing the required training, the prospective CH shall complete the training certification specified in the HHS Purchase Card Program Guide and submit it to the APC with a completed Request for New CH.

    2. Delegation of Procurement Authority.  Upon approval of the new CH request, the APC will complete a DPA using the template provided by the HHS Purchase Card Program Guide.  The DPA contains the CH's spending limits up to the micro-purchase threshold and other restrictions deemed appropriate by the A/OPC for obligating the Government.  For a spending limit in excess of the micro-purchase threshold, the cardholder must have delegated authority as a Contracting Officer issued by the HCA using the Standard Form 1402, Certificate of Appointment.

    3. Account Setup.  The approved Request for New Cardholder shall be transmitted by the APC or A/OPC to the servicing bank for account setup.

    4. Card Delivery.  The APC determines the method of delivery of the card to the CH.  The CH is responsible for verifying accuracy of the account information and following the servicing bank's procedures to activate the card.

  6. New Approving Official Setup.

    1. Completed Training.  After completing the required training, the prospective AO shall complete the training certification specified in the HHS Purchase Card Program Guide and submit it to the APC with a completed Request for New Purchase Card AO.

    2. Profile Setup.  The approved Request for New Purchase Card AO shall be transmitted to the APC for account setup.

  7. Refresher Training.  Refresher training is required to continue participating in the purchase card program.  All AOs and CHs must receive refresher training annually.  Failure to take the required training will result in the suspension or revocation of AO or CH account until training is complete.  The APC shall provide the CH and AOs with appropriate refresher training information.

5-23.4  CARDHOLDER PURCHASING PROCEDURES

After the individual completes the prerequisite IHS training and is in receipt of the purchasing card, the CH may begin the obligation and expenditure of funds to meet the needs of the requesting office.  Before initiating a purchase transaction using the credit card or convenience check, the CH must verify if Federal funds can be used to buy the product or service.  Additionally, the CH must obtain written pre-approval for the purchase, including certification of funds availability.

5-23.5  PURCHASE CARD PROCEDURE

  1. Purchase Card Request Form.  A Purchase Card Request Form shall be used to obtain approval prior to each proposed transaction and shall contain approval signatures from:

    1. Requestor

    2. Recommending Approval or Office Budget Official, to verify need and track against the office budget allocation.

    3. Approver; the person with delegated authority from the Office Director or Area Director to approve requisitions.

    4. Finance Office official to certify the availability of funds for the purchase.

  2. Completed Request Form.  After the Purchase Card Request Form contains all required signatures, the CH shall:

    1. Confirm that all items purchased will be delivered before the end of the billing cycle.  If the vendor cannot guarantee delivery and billing within the billing cycle, the CH should not place the order.  The purpose of this rule is to ensure that all items that appear on the monthly Account Statement have been received so that they can be certified for payment.

    2. Ensure that merchants do not charge back orders to the purchasing card.

    3. Instruct vendors to include the following information on the shipping document or packing slip:

      1. The CH's name and office

      2. The appropriate delivery address

      3. The CH's telephone number

      4. The term "Purchasing Card"

    4. Instruct the vendor to include all of the packing slip information on the invoice, plus the following:

      1. Unit of issue

      2. Price per unit

      3. Description of item(s)

      4. Unit price and total price

  3. Pick-up Supplies.  If someone other than the CH picks up the order and is required to sign the purchasing card receipt, it should be signed "Received by ..." Verification of the pickup is made by the CH when the monthly statement is certified and confirmed by the receipt in the purchase file.  This serves as a good internal control for the ordering, receipt, and payment of goods.

  4. Receiving.  The requestor is responsible for providing evidence of receipt to the cardholder, regardless of whether the shipping destination for the supplies or services is different from the ordering office location.  The documentation shall be provided to the cardholder within seven days of receipt to support reconciliation and approval of the transaction.

  5. Premium or Additional Charge.  If a registered merchant accepts the purchasing card but attempts to impose a premium or additional charge on the purchase, the merchant must be notified that premiums are prohibited by the GSA contract.

  6. Log.  All purchases must be recorded in a log that documents the purchase date, product or service description, merchant name, amount, convenience check number (if applicable), common accounting number (CAN), object class code (OCC), purchase card tracking number, and date received.

  7. Exceed Micro Purchase Limit.  All purchases that exceed the micro-purchase threshold limit must be purchased by a warranted Contracting Officer.

  8. Modifying an Approved Purchase Card Form.  An approved Purchase Card Form shall be modified when, at the time of the purchase, the approved amount is no longer sufficient to acquire the supplies or services required.  The CH shall return the original approved purchase form to the IHS Finance Office to obtain additional funds certification for the supplementary requested funding amount.

  9. Spending Limits.  The monthly and single purchase spending limits of purchasing card or convenience check accounts shall be set at the minimum levels essential for normal activity and shall not exceed the limitations of the individual DPA or warrant.  Exceeding the individual spending limit is an unauthorized commitment and must be processed accordingly.  The GCPC spending limits are:

    1. Single Purchase Limit.  A dollar amount on the procurement authority delegated to the CH.

    2. Monthly Purchase Limit.  The purchase limit imposed on cumulative purchases in a given month.  The monthly purchase limit for each CH is established by the management of that level, unit, or delegated procurement authority at the time the CH account is set up.

  10. Changing Account Limits (One-time Basis).  Occasionally, a unique situation or emergency may require a purchase over the CH's established limits.  On receiving a request to change the account, the AO should contact the APC or A/OPC.  If the APC determines that the request is valid and a bona fide need exists, the APC or A/OPC will make the one-time change to the spending limit.  The APC or A/OPC is responsible for the timely reinstatement of the normal spending limit.  The single transaction limit may not be raised over the CH delegated procurement authority under any circumstances.

  11. Guidance on Specific Purchases.  The IHS purchasing card program is for the purchase of materials, supplies, goods, and services as authorized in this transmittal notice.  Specific purchase guidance:

    1. Personal Property.  Items of equipment, accountable personal property, and sensitive items must be requisitioned through iProcurement for acquisition by the contracting office and may not be acquired with a purchase card except when the purchase is deemed urgent and the use of a purchase card is approved by the Property Management Officer.  When property is purchased with a purchase card, all required pre-purchase approvals and clearances must be included in the official purchase file and the CH must ensure that the Property Management Officer is notified when the property is received.

    2. Training.  The purchase card may be used to pay for training when the training request is properly approved in advance of the requirement and the purchase CH is identified in the payment section of the training form.

      1. When registering a trainee for any training course(s), a Standard Form (SF) 182 "Authorization, Agreement, and Certification of Training," must be generated and routed through the approval process and must include a statement that the training is to be paid by purchasing card.  This prevents a double obligation of funds.  The training form number and the name of the trainee must be noted next to the amount charged.

      2. Section F - Certification of Training Completion and Evaluation of the SF 182 should be completed and returned to the CH to serve as a form of receiving as indicated in Section E of the form.  A properly executed SF 182 meets the requirements of 5-23.5(A) as a purchase card request form.  These training instructions do not apply to IHS scholarship recipients who are paying for courses, books, and materials or to nursing students under Section 118 authorized by the Indian Health Care Improvement Act, Public Law 94-431, as amended.

  12. Unauthorized Use of the GCPC.  Purchase limits and Merchant Activity Codes are established for each CH account and provide system controls to reduce the risk of unauthorized use.  However, each CH and AO should be cognizant of the applicable limits and other factors affecting whether a purchase is appropriate and shall not rely on system controls to determine allowability.

  13. Authorized Single Purchase Limit.  The total of a single-purchase may be comprised of multiple items but cannot exceed the authorized single-purchase limit assigned to the CH.  Purchases may not be split in order to stay under the authorized single-purchase limit.  All purchases that exceed the limit must be purchased using alternate simplified acquisition procedures, through the respective contracting (Acquisition) office.

  14. Service Contracts.  An IHS employee who does not possess legal authority to enter into a service contract may not purchase such a Government requirement using a purchasing card or convenience check.  Merely presenting a purchasing card as a means of paying for said services does not confirm that the CH has the legal authority to enter into a formal contract.  Service contracts for specific purchase descriptions or a scope of work with specific requirements and deliverables of a nature to be negotiated must be forwarded to the respective, warranted CO.  Non-acquisition CHs do not possess the legal authority to enter into contracts using the purchasing card.  Since this type of contract is subject to protests, disputes, and claims or other legal matters, only warranted IHS CO's possess authority to award such contracts.

  15. Federal/Departmental/IHS Requirements.  The CHs must follow all Federal, Departmental, and IHS requirements including those specified herein.

    1. The purchasing card and convenience checks may not be used to provide or pay for personal use items, travel expenses, cash advances, and subsistence items for Federal employees or any other persons, greeting cards or business cards, the rental or lease of land or buildings, major telecommunication services, Federal salaries, wages, or reimbursement purposes.

    2. The CH must not purchase any supplies, goods, or services contrary to 31 U.S.C. § 1301 or violating any requirements of the FAR, HHSAR, IHS appropriations.

    3. Federal funds may be used only for the purposes for which they were appropriated.  Unauthorized use, fraud, or abuse involving the purchasing card or convenience checks by an individual is subject to termination of his/her account, disciplinary action, an Office of Inspector General (OIG) investigation, and possible criminal prosecution.

  16. Fund Control.  The CH must ensure funds are available before making any purchases.

  17. Security of the GCPC.  The individual CH is responsible for the security of the purchasing card.  The CH should do the following:

    1. Take precautions to prevent others from having access to his/her purchasing card.

    2. Not give out the account number to anyone, since this could lead to misuse and personal liability.

    3. Keep the GCPC secured at all times.

5-23.6  CONVENIENCE CHECKS

  1. Convenience Check Use. Convenience checks shall be used for official Government business and only when the vendor is unable and or unequipped to accept the purchasing card.  The use of a convenience check is authorized only when use of the Electronic Fund Transfer is unavailable for payment and other authorized payment mechanisms, such as the purchasing card or Treasury checks, are not possible.  The use of a convenience check is considered the last alternative for payment.

    1. The GCPC check accounts do not accrue interest.  Convenience checks will be authorized only for purchase CHs and are considered a supplement to the program.  A convenience check account will not be approved independent of an existing purchasing card account.  Under the IHS Check Account program, the check writing authority is delegated only to IHS contracting officers and approved CHs.

    2. The APC and the A/OPC are the only people authorized to submit convenience check account setup forms and make account changes.

    3. Convenience checks should be used only after obtaining advance approval from the AO and convenience check writer and only when supplies or services cannot be readily obtained using the purchasing card.

      1. The convenience checks are personalized with the individual's name, office address, and the Great Seal of the United States.  As with the purchasing card, no other staff member, family, friends, supervisor, or anyone else may use the individual's convenience checks.  The CHs are responsible for all convenience checks written on their account.

      2. It is important to note that all information, rules, and regulations set forth for the general use of the purchasing cards are applicable to the convenience checks, unless otherwise specified.  Identical terms and definitions apply to both the purchasing card and convenience check account writing programs.

      3. Convenience checks shall not be used for reimbursements other than for valid procurement.

  2. Use of Convenience Checks.  As with the purchasing card, the use of a convenience check does not relieve an IHS employee from adhering to any Federal, Departmental, and IHS acquisition regulations, policies, and procedures that may apply.  When using a convenience check, the following information shall be entered in ink or typed:

    1. Date.  Enter the date on which the convenience check is prepared.  Do not predate or postdate a convenience check.

    2. Pay To the Order Of.  Enter the name of the payee in this space.

      1. Under no circumstances may convenience checks be issued to "Cash."

      2. Convenience checks must never be made payable to the CH or other IHS employees.

    3. Amount.  Write the dollar amount of the convenience check, e.g., $126.39 and One hundred twenty-six and 39/100, followed by a horizontal line out to the end of the space provided.

    4. Authorized Signature.  The signature must match the name printed on the convenience check exactly, e.g., first, middle, and last name.

    5. Additional Information.  The CH must enter a brief description of the requirement on the "For" line of the convenience check.

    6. Other applicable information.  Any other applicable information should be entered in the convenience check register.

  3. Check Register.  Specific purchase information for each convenience check shall be recorded in the check register.

    1. The mathematical calculations for convenience checks must be checked for correctness, as convenience checks can only be written for the exact amount of the purchase.

    2. Convenience check sets will include an original and a carbon copy of each convenience check.  Duplicate carbons must be treated and retained as official Government records.

    3. If an error is made and a convenience check must be voided, the CH shall write in ink or stamp "Void - Not Negotiable" on the check and the carbon copy in the space provided for the authorized signature.  Both the voided convenience check and the carbon copy must be retained and maintained in the CH's files.  These records are subject to oversight reviews.

  4. Exceeding Single Purchase.  The single purchase limit restricts the amount of spending for each transaction.  The APC will inform the CH of his/her delegation.  Issuing a convenience check that exceeds the approved purchase level will subject the CH to ratification procedures by the CCO.  Repeated infractions will warrant termination of both the purchasing card and convenience check privileges.  Oversight by IHS HQ will include a review of timely and appropriate ratifications of such occurrences.

  5. Convenience Check Fees.  Fees are a percentage of the face value of the convenience check.  Request for purchases to be paid by convenience check must include this fee; purchases will not be made or paid for until the fee is included.  The percent fee is an added cost to the requestor and may not be transferred to the finance or contracting office.

    1. Stop Payment.  If a stop payment is necessary, the GSA Contractor or Servicing Bank is to be notified immediately.  There may be a charge fee per convenience check for this service.

    2. Overdraft.  Exceeding any of the aforementioned check limits will result in a convenience check(s) being returned or force-posted by the bank.  A fee may be charged by the bank for each occurrence.

  6. Check Authority and Responsibilities.  It is imperative that single purchase and monthly limits not be exceeded.  Check writers are responsible for tracking their individual available balance and recording the cleared convenience checks.  Convenience check is deducted from the monthly limit when the check clears the bank, not when it is written.  Therefore, it is important to allow enough time for each convenience check to clear, since the checks may overlap billing cycles.  The CH is responsible for ensuring that when all convenience checks have cleared, the monthly limit will not have been exceeded.

  7. Convenience Check Register.  Each convenience check written shall be entered in the check register.  The convenience check number, date issued, payee, a brief description of the purchase, the fee, and the check amount must be entered.

  8. Reconciliation of Convenience Checking Account.  The Account Statement must be reconciled with the convenience check register to ensure that the amounts are the same.  If a billing error is identified, such as a dollar amount on the convenience check differing from the amount on the Account Statement, the GSA Contractor or Servicing Bank is to be contacted immediately to confirm the amount or contact the vendor and resolve the discrepancy.

  9. Safeguarding and Accounting for Blank Convenience Checks.  For security purposes, the following items are pre-printed on the face of all convenience checks:

    1. Name of the authorized convenience check writer

    2. "For Official Use Only"

    3. "U.S. Government Tax Exempt"

    4. Name of the Agency/Organization

  10. Termination.  If the purchasing card or convenience checks account is terminated for any reason, all convenience checks for that account must be destroyed and the action annotated in the convenience check register.  The bank will not honor any convenience checks from a terminated (closed) account.

  11. Security of the Convenience Checks.  The individual CH is responsible for the security of the convenience checks.  The CH should do the following:

    1. Take precautions to prevent others from having access to his/her convenience checks.

    2. Not give out the account number to anyone, since this could lead to misuse and personal liability.

    3. Keep all convenience checks secured at all times.

  12. Safeguard Unused Convenience Checks.  This is mandatory and essential.

    1. Perform an inventory of the blank convenience checks on a regular basis.

    2. Maintain the blank convenience checks in a fire resistant safe or cabinet, preferably with a lock and dual control system.

5-23.7  PROCEDURES AFTER PURCHASE AND RECONCILIATION

  1. Disputes.  If items purchased with the purchasing card are found to be defective or if services purchased are found to be unsatisfactory, the CH has the responsibility to obtain replacement or correction of the items.  If the merchant refuses to replace or correct the faulty item, the purchase will be considered "in dispute."  Once dispute is initiated, the GSA Contractor will credit the transaction until the dispute is resolved.

    1. Any dispute that cannot be resolved by the CH or AO should be elevated to the APC in his/her Area Office and/or the A/OPC at IHS HQ.  The APC and/or A/OPC should be provided with all documentation related to the purchase.

    2. The CH shall be held personally liable for failure to dispute incorrect or improper charges.  In cases where CH fails to resolve and/or timely dispute an erroneous charge, the CH shall reimburse the government for the cost of that transaction.  See OMB Circular A-123, Appendix B.

    3. The following charges cannot be disputed because of external regulations or by terms and conditions of the GSA SmartPay contract:

      1. Foreign exchange rates

      2. Taxes

      3. Convenience checks

      4. Shipping and handling charges

  2. Separate Agreement Charges.  The CH must be aware of circumstances where merchants may charge a value over the amount authorized by the CH.  This is rare and occurs when a separate agreement is in place and other terms and conditions apply to the transaction.  The CH must contact APC to inquire about the situations which charges may apply.

  3. Sales Tax.  Cardholders must verify that no sales tax has been included or added later to the order.  If a sales tax has been included, the CH must immediately resolve the error.  The GSA Contractor or Servicing Bank cannot reverse sales tax charged by the vendor.

5-23.8  RECORD KEEPING

  1. Fiscal Data.  It is the responsibility of each CH to keep copies of each charge or credit, reconcile each monthly statement, and forward the information to the AO.  Each CH must write the CAN and OCC when reconciling the transaction as appropriate:

    1. To reduce the possibility that all items reconciled may be charged to the same CAN and OCC.

    2. To identify multiple CANs and OCCs.

  2. Record-keeping and Retention.  The GCPC records include the Account Statement, convenience check registers, all receipts, and supporting documentation for purchase descriptions, justifications, quotes, etc.  These documents are considered official Government records and shall be retained by the CH as Accountable Officers' Files under the National Archives and Records Administration's General Records Schedules.

    1. Each CH must set up a monthly purchase file containing all proof-of-purchase documents associated with purchasing card and convenience check transactions.

    2. When a purchase is made over the counter, the CH must obtain a customer copy of the sales slip.

    3. Any shipping documents or cash register receipts associated with the order shall be maintained in the purchase file.

  3. Convenience Checks Purchase Files.  All convenience check records, especially those for which the CH has paid for services rendered, are to be retained by the check writer for a period of 6 years and 3 months.  Information related to IRS 1099 reporting must be submitted to the IHS Billing Official yearly for 1099 reporting issuance.  The purchase files are subject to periodic reviews and must include the following:

    1. Vendor name and address

    2. Vendor Employer Identification Number (EIN), Social Security Number, etc., when required for IRS 1099 reporting

    3. Amount and date of purchase

    4. Convenience check number

    5. Description of purchase applicable only to services rendered (materials, goods or supplies)

    6. Receipts

    7. Explanation of why a convenience check was used in lieu of the EFT or a purchasing card

    8. Carbon or copy of the issued convenience check (if possible)

5-23.9  LOST OR STOLEN PROCEDURES

  1. Lost or Stolen Cards.  Should a purchasing card be lost or stolen, the CH must notify the AO, APC, or A/OPC, and the servicing bank immediately.

    1. The IHS will not be liable for any unauthorized use of the purchasing card.

    2. The CH may be held negligent and administratively accountable to the IHS if the loss is not reported immediately.

    3. When reporting a lost/stolen card, the servicing bank may request additional information pertinent to the loss or theft.

    4. A new account will be opened and a replacement purchasing card issued.

  2. Lost or Stolen Convenience Checks.

    1. The CH must immediately notify the AO, APC or A/OPC, and servicing bank to report the lost or stolen convenience check(s).

    2. If there are only one or two stolen or missing convenience checks, a stop payment action is the most appropriate action.

    3. If more than two convenience checks are lost or stolen, the account shall be terminated (closed), and a new account opened.  The APC or A/OPC will make the determination to open a new account.

  3. Electronic Theft.  When an electronic theft occurs or is detected the GSA Contractor or servicing bank will immediately, upon detection or formal notice, take independent action(s) on the CH's account.  The GSA Contractor or the servicing bank's investigation unit will directly notify the CH and terminate the account.

    1. The GSA Contractor or the servicing bank will coordinate with the APC and/or A/OPC to open a new account for the CH within 24 hours unless probable cause exists not to do so.

    2. The CH is responsible for immediately notifying the AO and APC when contacted by the GSA Contractor or Servicing Bank.

    3. The APC will notify the A/OPC unless the A/OPC was notified when the theft occurred or was detected.

    4. If the theft remains undetected until the Account Statement is received by the CH, the CH must immediately notify the vendor and confirm that he/she is not responsible for the transaction.  Upon notice to the AO and APC, the CH and AO must notify the GSA Contractor or Servicing Bank of the electronic theft and request that the purchasing card be terminated.  This termination action must be reported to the A/OPC.

    5. The CH must cooperate with the GSA Contractor's or Servicing Bank Investigative Unit when this occurs since they have the initial legal jurisdiction for investigation.  The local police and or the OIG may be brought in to assist, or the matter can be referred to law enforcement for prosecution.  The investigation may also include a review of all purchase file records during or at the time of the theft as well as interviews with the CH and AO.

5-23.10  TERMINATION PROCEDURES

  1. Administrative Changes in Cardholder Status.  When a CH transfers, retires, or resigns, the CH must destroy the card by cutting it in half and submitting the destroyed card to the AO.  The AO is responsible to:

    1. Notify all purchasing card holders intending to retire, resign, or transfer to cease making any purchases on the card 45 days prior to the effective date of their action.

    2. Ensure that prior to an application for a new purchasing card, the Area Office APC requests written clearance that the CH is in good standing from the CH's previous Area Office APC.

    3. Confirmation is necessary that all purchases have been received and that no disputes, irregularities, or misuse by the CH exists at the previous Area Office.

    4. If any abuse or misuse of the purchasing card or convenience checks is found in the account or after final payment, a card will not be issued to the individual at the new duty station.

    5. Note:  No card will be issued for 1 year or until the matter is completely resolved to meet the Government's interest.


  2. Administrative Changes in Approving Official Status.  When an AO transfers, retires, or resigns, the AO must do the following:

    1. Notify the APC or A/OPC prior to being reassigned or leaving the organization of their estimated departure date.

    2. Inform their respective Office Director with sufficient time prior to their departure that a new AO must be nominated and appointed prior to departure.

    3. Ensure that all pending transactions under their purview are reconciled and approved with the corresponding purchase record.

    4. Inform the new AO the status of the office's CHs as if they are in good standing and that no disputes or irregularities are pending resolution.

  3. Ratifications.  All IHS offices shall ensure that contractual commitments are executed in a manner conducive to sound acquisition practices and within applicable Federal regulatory guidelines.  Ratification procedures will be applied to unauthorized or improper procurements involving the use of the purchasing card or convenience checks.

    1. If Federal funds were improperly used or no funds were available, the purchase cannot be ratified and the CH shall be required to repay the cost to the Government and be subject to disciplinary action.  In instances where an official directs the CH to incur purchases that are subsequently determined to be improper, the official who directed the purchase shall reimburse the Government and be subject to disciplinary action.

    2. Sanctions for exceeding any authority include rescinding delegated authority, termination of the purchasing card, and/or other administrative actions.

5-23.11  INCORRECT USE; UNAUTHORIZED USE; FRAUD AND MISUSE

  1. Incorrect Use.

    1. Definition.  Incorrect use is an unintentional error made using the government purchase card during the purchase process.

    2. Procedures for Incorrect Use.  The APC will provide counseling to the CH to prevent recurrence, and if the CH fails to resolve or timely dispute (as applicable) incorrect charges, the APC will pursue reimbursement from the CH or the official who directed the CH to make the purchase.

  2. Unauthorized Use.

    1. Definition.  Unauthorized use is intentional purchase with the government purchase card of items that are outside of the CH's purchasing authority.

    2. Procedures for Unauthorized Use.  Indications of unauthorized use should be immediately referred to the APC.  The APC will review the purchases and submit their findings to A/OPC.  To prevent further liability to the government, the APC may suspend CH's account while review is conducted.  The A/OPC will take appropriate action based on the circumstances including account termination, referral for disciplinary action, or referral for investigation where fraud or misuse is suspected.

  3. Fraud and Misuse.

    1. Definition.  Fraud and misuse refer to unauthorized purchases intended for personal benefit.

    2. Procedures for Suspected Fraud.  The Department and the IHS Purchase Card Program continuously monitor accounts for suspicious activity.  In cases of suspected fraud, the APC must notify the A/OPC immediately.  The A/OPC must refer these instances to independent investigatory agencies as required by OMB Circular A-123.  Agency Program Coordinators must not interfere or compromise investigations being conducted by the investigating officials.  Agency Program Coordinators must not take disciplinary action if fraud is suspected.


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