Discipline in the Public View – Credit Card Misuse VI

By Barbara Haga

Last month’s column addressed travel and purchase card misuse.  We continue with a discussion of the OMB guidance regarding dealing with instances of misuse.    

OMB’s Opinion

Appendix B of OMB Circular A-123 entitled Improving the Management of Government Charge Card Programs (January 2009) sets out requirements for managing purchase and travel card programs.  Paragraph 3 includes requirements for training for card holders and approving officials; paragraph 4.3 mandates that agencies to establish risk management strategies including 1) closely monitoring delinquency reports from charge card vendors; 2) contacting appropriate personnel to ensure that delinquent payments are addressed and corrective actions are taken to prevent further occurrences; and 3) establishing controls, policies, and practices for ensuring appropriate charge card and convenience check usage and oversight of payment delinquencies, fraud, misuse, or abuse. 

Paragraph 4.5 address the actions agencies regarding delinquent card holders.  These include suspending the accounts as well as instructing the charge card vendor to cancel cards, initiate collection efforts, notify credit bureaus, etc. The guidance also suggests imposing disciplinary action deemed appropriate by the agency. Paragraph 4.9 makes a similar recommendation regarding purchase card holders. These suggestions seem reasonable, but somewhere between these paragraphs and Attachment 5 on Best Practices the recommended actions expanded to this list:

When initiating administrative or disciplinary actions for card misuse and/or for instances when account delinquency is discovered, CHARGE CARD MANAGERS SHOULD (my ALL CAPS), 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.

What are the Issues with this Guidance?

Thankfully OMB suggested that charge card program managers coordinate with the HR as part of these actions, but I am afraid that is not going to overcome some of the fundamental problems.  First, authority to take disciplinary action is normally delegated through the chain of command of an organization, so the proposing and deciding officials are typically supervisors and higher level managers in that employee’s reporting chain.  An agency might delegate authority for all of a certain type of action such as charge card abuse to one official, but in all of my review of cases related to charge card use I did not find a decision where that was noted. 

Some of the guidance regarding the charge card manager’s authority is reasonable.  Suspending or revoking charge card privileges is what one would expect the card manager to do in such circumstances.  Other parts of the guidance are problematic.  The list of actions states that charge card managers should, in consultation with agency human resources professionals, initiate verbal counseling and warning, provide written warning, suspend or terminate employment, and ensure consistent enforcement of penalties.  Since charge card managers would not be in the employee’s reporting chain in most cases, it is easy to anticipate where problems could arise.  Proposing and deciding officials are being told what to do so that they did not have authority to truly decide the matter (a la, security clearance denial/revocation cases).  One can imagine what the current MSPB would do with that kind of scenario. 

Speaking of security clearances, the guidance provides that charge card officials should suspend or revoke employee security clearances.  Reporting the information to security officials where card holders also are required to have security clearances would make sense since matters of debt and financial insolvency are issues in the granting of clearances, but I don’t know of a combination charge card program manager/security manager job in any agency.

Which recommendation makes the least sense?

Including occurrence of misuse or delinquency in employee performance evaluations is the suggestion that gives me the most heartburn. 

In June 2013 in one of my earliest FELTG columns I wrote about mixing up disciplinary matters in performance plans.  What I said then still makes sense. 

Disciplinary infractions should be dealt with in the discipline system, and performance problems should be dealt with performance procedures.   Procedures for dealing with poor performance are designed to teach and coach and develop skills and abilities so that the employee can meet the critical functions of the job.  Discipline is designed to correct misconduct – infractions, failure to follow rules and procedures, etc.

Misusing a credit card to me is a very clear example of failing to follow rules and procedures.  Would it make sense for an agency to give an opportunity period when Gerald uses his government travel card to take more cash advances than what is authorized for the period of travel?  With that logic if Gerald didn’t do it again during the opportunity period, there would be no action, right?   What if Gerald was disciplined for credit card misuse in the third month of the appraisal cycle and didn’t commit any further misconduct for the remaining nine months.  Should Gerald be rated at below Fully Successful?   

What to Expect

This is a topic that is getting attention. Just this week an article was issued by the Daily Signal, a publication of the Heritage Foundation, with the eye-catching title Government Employees Spent Almost $1 Million in Taxpayer Money at Casinos (http://dailysignal.com/2016/02/08/government-employees-spent-almost-1-million-in-taxpayer-money-at-casinos/). The article notes that the Senate passed legislation trying to put more teeth into credit card program management through the Saving Federal Dollars Through Better Use of Government Purchase and Travel Cards Act of 2015 (S. 1616) in December.  The article suggests that if money is being wasted on such expenditures perhaps budgets could be reduced as part of larger cost-cutting measures. 

The legislation was referred to the House Committee on Oversight and Government Reform on December 17th.  Govtrack.us says the bill has a 45% chance of passing.  The Committee is busy with trying to control administrative leave right now, but I think this will be an easy segue for them.  Haga@FELTG.com