Purchase Card Has Enabled Agencies to Support Missions at Reduced Costs and Time

Agency officials have used the purchase card and the micropurchase authority provided in FASA to move simple purchases from procurement offices to program offices. Purchase Card Program Has Significant Growth Potential

Since the beginning of the purchase card program, the use of the cards has skyrocketed. However, there is still significant growth potential for card use. In fiscal year 1995, the average purchase card transaction, which could include purchases of several items, was $375. We found no evidence of increased abuse. In fact, with the controls required by the purchase card contract and some tools that agencies have developed, purchase card use can be closely monitored. Such weaknesses included noncompliance with procedures and failure to record purchases of accountable property. Agency officials told us they were emphasizing card use, reengineering their processes, and developing automated tools to improve their programs. Agencies Lack an Effective System for Sharing Innovations and Experiences

Most of the agencies in our review have identified the potential to increase their savings or efficiencies gained from card use by reengineering their programs or using automated tools to improve their processes. Agencies have found that their improvement efforts can be useful to other agencies. We therefore recommend that the Administrator for Federal Procurement Policy ensure, in conjunction with the Federal Acquisition Regulatory Council, that the FAR provides clear guidance on the appropriate uses of the purchase card as a means for making payments, purchases, and orders from established contracts and establish a site on one of the government’s electronic media, such as the Acquisition Reform Net on the Internet, to facilitate agencies’ efforts to exchange information about problems or progress with purchase card use. To determine the extent to which card use has resulted in administrative savings or other benefits, we interviewed purchase card program coordinators, officials from agency finance and procurement offices, and officials from GSA, NPR, and the Office of Federal Procurement Policy.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed federal agencies' progress in using purchase cards, focusing: (1) the extent to which card use has led to administrative savings or other benefits; (2) the potential for growth in card use; (3) agencies' management controls; and (4) opportunities to improve agencies' purchase card programs.

What GAO Found

GAO found that: (1) the use of purchase cards for small purchases can reduce agencies' mission support, labor, and payment processing costs 50 percent by moving simple purchases from procurement offices to program offices and consolidating payments; (2) some agencies have found that purchase card use has helped them absorb the impact of administrative staff reductions and improve service delivery; (3) although the use of purchase cards has increased since 1990, there is potential for greater card use; (4) in fiscal year 1995, the average purchase card transaction was $375, well below the micropurchase threshold of $2,500; (5) there is no evidence of increased abusive use of purchase cards despite tremendous growth in the purchase card program; (6) electronic records of all purchase card transactions allow close and detailed monitoring of card use; (7) agencies' management controls are adequate to protect the government's interest and agencies are addressing control weaknesses and failures to follow proper procurement procedures; (8) most agencies are trying to improve their card programs by emphasizing card use, reengineering their processes, and increasing their use of automation; and (9) opportunities to improve the card program include revising the Federal Acquisition Regulation (FAR) to address card use more thoroughly and establishing a mechanism so agencies can share their innovations and experiences.