Discipline in the Public View – Credit Card Misuse V

By Barbara Haga

Now that the holidays are over and credit card bills are arriving in mailboxes around the country, it seems like a good time to return to looking at credit card issues in Federal agencies.

“Saving Federal Dollars” Closer to Reality

I mentioned in the first credit card misuse column published in August 2015 that another bill designed to ferret out misuse in the Federal government had been introduced in Congress. That bill, Saving Federal Dollars Through Better Use of Government Purchase and Travel Cards Act of 2015 (S.1616), was passed by the Senate on December 16, 2015. It’s probably not exactly what most Federal employees would have included on their lists for Santa, but the Senate delivered something new for agencies to play with anyway.

This version of the bill is different than what was originally proposed. The original bill would have set up a specific office in GSA to manage these efforts but that was eliminated; however, the Senate version charges GSA with working with OMB on creating data analytics for managing both travel and purchase card programs across government.  Agencies will have a requirement to review questionable transaction reports issued by credit card companies. There would be an interagency group that would meet to look at these matters and, of course, there are required reports to Congress a year after enactment for agencies, too.

Purchase Cards

While most card-misuse cases that come across the average Employee Relations practitioner’s desk will involve an employee’s travel card, purchase cards can also be misused. Congress has that in their sights since the “Saving Federal Dollars” specifically covers both types of cards. The case of Sedita v. Department of the Army (1998) is a case in point.

Sedita was removed from the position of Facility Management Officer, GS-13 in 1998. His job required him to monitor the work of contractors and to certify to work performance so that payments could be issued for work completed. He was also responsible for purchasing items for facilities under his care using a government commercial credit card. The limit for purchases on the card was $2500 at that time. The relevant guidance on the use of the card specifically prohibited splitting large purchases into smaller purchases to circumvent those monetary limitations.

Sedita’s removal was based on charges related to both aspects of his job, but those relevant here are related to his use of his credit card to split purchases. One specification covered his use of the card to purchase and install one dehumidifier each for sixteen different agency locations for a total amount of $10,944.00. He originally submitted the request to the procurement office to contract for the purchase and installation of sixteen dehumidifiers, but it was near the end of the fiscal year and procurement office responded that there was not enough time to process the contract before the end of the year. Sedita alleged that he was advised to split the order by the Contract Specialist, but no evidence was produced on that point. Sedita purchased the same items and services from the same contractor and thus violated the credit card processing Standard Operating Procedure.

Another specification involved more work for the same contractor. That job involved work to convert a large office into four smaller ones. The total value of the work was $7,920. Sedita purchased the work with four separate credit card purchases. He contended that the installation of each wall and door was a separate job for which a separate invoice was prepared. The CAJ did not accept that explanation, finding that Sedita knew or should have known about this limitation because he was an experienced Facility Management Officer. It was noted that he might have been concerned that the funds for this work would have been lost if unused before the end of the fiscal year, but that did not excuse his violation of the purchase card procedures.

Travel Cards

Have you ever pulled out the wrong credit card and used your government card for a personal purchase? You don’t really have to answer that. Others have said they did, and indeed it has come up in more than one credit card misuse case. One was Callaway v. DoD, DC-0752-13-0004-I-1 (2013), which I covered in the October newsletter.

Another employee testified that she fell victim to this same failure to distinguish which card she was actually using in McFall and USDA, APHIS, Plant Protection and Quarantine, Federal Arbitration 008-50341, 108 LRP 37192 (2008). McFall, a Plant Health Safeguarding Specialist, was suspended for 14 days for misuse of the government travel card. She stated that she normally kept her travel card in the office safe but for some unknown reason had not returned it there after a prior trip. She used her government card to purchase four meals while not on travel and also purchased several items at Walmart using the card. The total value of the charges was less than $500.

She also argued that she had not had adequate training on use of the credit card and was not aware of a zero tolerance policy on misuse.

Arbitrator Hecht sustained the suspension. He concluded that McFall’s failure to take the usual precautions to safeguard the government card and separate it from her personal card more likely contributed to the misuse than any lack of training. He found her excuse of confusing cards possible on one occasion, but explained that it was her responsibility to ensure that would not happen on four occasions.

One thing that caught my eye in this decision was the guidance introduced in the record for dealing with misuse situations. The decision quotes OMB Circular A-123 indicating that instances of misuse should be included in performance evaluations. The Circular was revised in January 2009, but maintains the same language (OMB Circular A-123, Appendix B, Attachment 5). It states:

When initiating administrative or disciplinary actions for card misuse and/or for instances when account delinquency is discovered, charge card managers should, in addition to consultation with agency human resources professionals:

• Initiate verbal counseling and warning;
• Provide written warning;
• Suspend or revoke charge card privileges;
• Suspend or revoke employee security clearance;
• Include misuse or delinquency occurrence in employee performance evaluations;
• Suspend or terminate employment;
• Ensure consistent enforcement of penalties; and
• Publish actions taken by the agency for misuse of charge cards.

This list is such a mixed up jumble of things I wish they had never written down that I don’t know where to start. So, we will pick up here next month! Haga@FELTG.com

[Editor’s Note: OMB may know numbers, but they don’t know the federal performance appraisal program. If you are going to consider card misuse when assigning the employee’s annual performance appraisal, you’d darned sure better have something about using cards when you established the original performance plan. Otherwise, you can’t just insert it at the end of the appraisal year because OMB thought it was a good idea. And if you include it in the original performance plan, keep in mind that you are taking something that normally would be a MISCONDUCT issue and incorporating it into a possible PERFORMANCE case. There’s nothing that specifically prohibits that, but some agencies avoid mixing misconduct with performance for policy reasons.]