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December 20, 2011
In Reply Refer To:
1512 (855) P
Information Bulletin No. 2012-024
To:                   All Washington Office and Field Officials
                        Attn: Agency/Organization Program Coordinators (A/OPCs)
From:               Assistant Director, Business and Fiscal Resources
Subject:           Charge Card Program Management - Reducing the Number of Charge Card Purchase Business Line Accounts and the Use of the Convenience Checks
                                                                                                                     DD: 01/31/2012
This Information Bulletin (IB) describes the required procedures for reviewing records of the Bureau of Land Management (BLM) cardholders who have privileges to the charge card and convenience check writing program and determining whether it is commensurate with the cardholder’s historical use and projected needs. This review is required to be conducted regularly and is necessary to mitigate the risks inherent with the ubiquity of the program it will also help to reduce overhead costs associated with issuing checks at the rate of 1.9% per transaction. 
A recent Departmental of the Interior (DOI) analysis of the BLM’s convenience checks usage shows that over the last two fiscal years BLM has written 5,000 checks at a cost of $12M. The DOI analysis also discovered a significant number of checks issued that were written to vendors that were established to accept the charge cards.
Numerous high-profile instances of charge card, convenience check misuse and fraud have occurred over recent years. Both the Office of Management and Budget (OMB) and the Department of Interior, Office of the Inspector General (OIG) consider underutilized authority to be an unnecessary fraud risk. The DOI Integrated Charge Card Policy Manual requires a periodic review and adjustment to the number of cardholders and their associated credit limits.
During this review, the BLM, National Operations Center, Branch of Accounting Operations (OC-620) will provide, via email, detailed purchasing and convenience check transaction information to all the State, Center, and Washington Office (WO) Agency/Organization Program Coordinators (A/OPCs).  Validation of need is required for all individuals who have made fewer than 12 transactions a year, either by check, purchase card or both. The information provided
will contain the following information:  
  • A list of non-warranted purchase cardholders and the number of purchase transactions each person made during FY 2011. 
  • A list of convenience check writers and the number of checks each person issued in FY 2011. 
  • A list of purchase transactions for each cardholder, including all charge card and convenience check transactions. 
  • A list of convenience checks written by each check writer. 
Offices are required to review the aforementioned charge card /convenience check transaction information and submit a consolidated response to OC-620 and signed by the Deputy State Directors for Support Services, or their equivalent.
The appropriate columns identified in the Excel spreadsheet must be annotated electronically either with the proper justification for retaining purchase or convenience check authority, or with the new authorization control sets for each cardholder for whom purchasing authority is being reduced.   It is not sufficient to simply state that an individual may need the authority at some time in the future. A proper justification, for example, must explain the reasons why purchases cannot be performed by another cardholder in the organization or why the number of active accounts is needed to meet the agency’s mission. It is very important to understand that for regularly-occurring payments to the same vendor in a given year, the local procuring office must be involved and must issue an award accordingly if the aggregate total of all the regularly-occurring payments exceed the micro-purchase threshold (see IB 2011-064). In these cases, payments would normally be made by the designated finance office via Electronic Funds Transfer (EFT). If for some reason, EFT is not feasible, the next advantageous process to the Government is by paying against the award via the purchase card. The least preferred method of payment against the award is the use of a convenience check due to the additional transaction fee of 1.9%.
Although this IB requires organizations to closely analyze active accounts with 12 or fewer purchase card or convenience check transactions, the A/OPCs are also encouraged to review cardholder accounts with more than 12 transactions. 
The OC-620 staff will review all responses and coordinate with the States, Centers, and WO on any individuals for whom inadequate justifications were received.  The OC-620 staff will take following measures for individuals whom no justification was received:  
  • Charge card accounts for purchase cardholders assigned to purchase-only authorization control sets will be cancelled. 
  • Charge card accounts for purchase cardholders assigned to purchase/travel authorization control sets will be moved to travel-only authorization control sets with the standard travellimits of $7,500 for centrally billed travel and $2,500 for individually billed travel, unless different limits are specified. 
  • Convenience check authority will be terminated. 
Offices shall promptly destroy all unused convenience checks when an account is terminated and shall verify that all checks have cleared. If there are outstanding checks, a listing of the check number and check amount must be sent to OC-620. 
Subsequent requests for check writing privileges submitted to the Bureau Procurement Chief for approval will not be processed until the completion of the above review. New requests for check writing privilege must include copies of the individual’s purchase card and convenience check training certificates, a letter justifying the need for issuing checks and why the swipe card or Electronic Funds Transfer is not feasible. Additionally, a convenience checks transaction report for the requesting office for the previous six months must be included in the package. This report shall identify the check writer’s name, vendor’s name, date of transaction, description of what was purchased, and the dollar amount of the check.
State, Center, and WO lead A/OPCs are responsible for notifying cardholders of any changes to their purchase and/or convenience check writing authority.
If you have any questions, please contact Lloyd Fread, (OC-620), at (303) 236-5927 or Kenneth E. Lund, (WO-855), at (202)912-7034.
Signed by:                                                       Authenticated by:
Janine Velasco                                                 Robert M. Williams
Assistant Director                                            Division of IRM Governance,WO-560
Business and Fiscal Resources 

Last updated: 12-22-2011