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					GSA SMARTPAY CONFERENCE

     DoD Charge Cards

       19 August 2003


                          1
            Ms. LeAntha Sumpter
Director, Purchase Card Joint Program Management Office


            Mr. Steven Johnson
        Travel Card Program Management Office




                                                      2
       Task Force/MID 904 Actions




•DoD Charge Card Task Force
  • Established by USD ( C) – March 2002
  • Made Recommendations to Improve
  Oversight and Strengthen the Department’s
  Charge Card Program
  • Management Initiative Decision (MID) 904
  established to track implementation of
  recommendations

                                               3
             Summary of MID 904 Actions




Common:             Purchase Card:      Travel Card:
    Completed: 3    Completed: 14           Completed: 8
    Green: 2        Green: 0                Green: 5
    Yellow: 6       Yellow: 1               Yellow: 4
    Subtotal: 11    Subtotal: 15            Subtotal: 17

                                Key:
                                Green: Plan and Schedule
                                Developed
                                Yellow: Plan Developed;
                                Schedule TBD
                                                           4
 Common Items
Purchase & Travel




                    5
                Completed MID 904 Actions


                       Common Items

CO-01 Deputy Secretary of Defense Issued Guidance on Charge Cards

CO-06 Report Charge Card Data to OMB

CO-09 Reduce Number of Charge Cards to under 1.5 Million Accounts




                                                                    6
                 On-track MID 904 Actions


                   Common Items
CO-02 Issue DoD Directive on Charge Cards

CO-11 Report Status of MID 904 Actions




                                            7
                  Creditworthiness Issues

                               Yellow
 Requirement:         Statutory requirement to evaluate the creditworthiness
  of an individual prior to issuance of a purchase or travel charge card


 Conflicting Statutes:
    Mandatory use of Travel Card - Travel & Transportation Reform Act
    Individual consent for credit check - Fair Credit Reporting Act
    Obtaining Social Security Numbers for Purchase Cards - Privacy Act
    Creditworthiness requirement - FY03 Defense Appropriation Act




                                                                       8
                                                             CO-7
                 Creditworthiness Issues


 Pending Legislation:               C
  House Appropriations Bill – No Language
  Senate Appropriations Bill – Extends requirement to FY04
  FY 2004 Senate Authorization Bill – Travel Card Only
  FY 2004 House Authorization Bill - No Language
  Defense Transformation Bill – Bargaining procedures


 On-going Efforts:
  Jun 03 – Director of Defense Procurement and Acquisition Policy
      met with OMB
  Implementation Policy –
      Travel Card – credit check minimum score and self-certification form
      Purchase Card – envisioned as part of paperless
                 authorization/authentication process
                                                                             9
                                                                 CO-7
      Disciplinary and Administrative Actions

                           Yellow
Disciplinary Guidelines:
   21 Apr 03 – Civilian Personnel Policy Memo
   10 Jun 03 – Military Personnel Policy Memo


Tracking and Reporting Personnel Actions:
   OMB Reporting Requirement
   23 Jun – OUSD(P&R) Memo
       Civilian Personnel Systems Enhancement Completed
       Military Personnel Systems – Enhancements Possible
   Evaluate Results of Data Mining Pilot (Source for Non-Fraud Actions)

Next Steps:
   OUSD(C), OUSD(P&R), OUSD(AT&L) Finalize Data Collection
    Requirements
                                                                    10
                                           CO-5, CO-8, CO-10
            Develop Methods to
   Control Charge Cards upon Departure

                      Yellow
Purchase and Travel Card
    23 Jun – OUSD(P&R) Memo


Travel Card
    Interim Process in Use - DMDC matching lists
        over 6,500 accounts closed by APCs since January


Long-Term
    Determine Appropriate System to Use
    Resolve Method of Identification for Purchase Cardholders
    Develop Alternative Solution for Authorization to Enable CAC
     Card
                                                                 11
                                                     CO-3
                   Data Mining Strategy

Data Sources:                  Yellow
   E-Mall; GSA Advantage; Warfighter.net; CCR/BPN; Banks/TSYS;
    Purchase Logs; UPC/UID; Providers of Level 3 Data
Purchase Card Automated Reconciliation Transaction
Tool (PCARTT)
   Jun 03 – Pilot Completed
   Oct/Dec 03 – Phase II
   Mar 04 – IOC
Lessons Learned:
   Criteria
   Buy-In
   Document the Process
   System Flexibility
   Data Purity
Travel Card Program in FY04                                       12
                                                      CO-4
Purchase Card Issues




                       13
                Completed MID 904 Actions

                      Purchase Card
PC-01   DoD Concept of Operations (CONOPS) Published
PC-03   Span of Control Policy Issued
PC-04   Training Material for PC Officials Developed
PC-05   List of Recommended Skills and Grade Published in DoD CONOPS
PC-06   Strengthened Pecuniary Liability Procedures in Regulations
PC-07   Additional Methods to Prosecute Fraud Identified
PC-08   Strengthened Compliance Language in Regulations
PC-09   Coordination of Cases of Abuse with Investigative Agencies and
        Security Managers/Supervisors Required
PC-10   DoD CONOPS - Skills and Duties be noted in job descriptions/Standards
PC-11   Requirement Established for GPC Training Data Base
PC-12   Mandatory Review of Approving Officials Non-GPC Workload Required
PC-13   Strategic Sourcing Strategy Developed
PC-14   Standard Review Checklists Developed & Published in CONOPS
PC-15   Standard A/OPC Oversight Requirements Established

                                                                    14
               Accelerate Implementation of
                 Electronic Certification
                               Yellow
Key Events:
  USD(C)/USD(AT&L) Memo Mandated Electronic Certification by December
   2002
  DoD Master Implementation Schedule in April 2003


 Waiver Criteria and Approval Process:
  Develop Business Case Analysis:
      Define Current Certification Process
      Address Internal Controls
      Illustrate Timely, Accurate Certification
      Provide Implementation Schedule
  Signed out by Component Acquisition Executives with FM Coordination
  Approved by OSD DDP with USD(C) Coordination

                                                                  15
                                                          PC-2
Travel Card Issues




                     16
               Completed MID 904 Actions

                       Travel Card
TC-1 Management metrics - delinquencies and cardholders

TC-3 Reduction of cards - Approximately 600K

TC-4 Review definition of frequent traveler
TC-8 Exemption for en-route (Deployment) travel

TC-10 Notify security managers of card fraud

TC-12 Awareness of training resources
TC-13 Infrequent traveler definition – Confirmed 1 or 2X Exempt

TC-15 Evaluate feasibility/cost to track reimbursements
      (Interest Due)


                                                                  17
                 On-track MID 904 Actions

                       Travel Card
TC-2 Split Disbursement Mandatory Military/Default Civilian
TC-6 Travel Voucher Process Review
TC-7 Evaluate Alternatives to the Travel Card
TC-14 Comprehensive Training – Std. DoD Training from DoN
TC-16 APC Roles, Span, Training, Performance

Other Actions:
Monthly report on charges against blocked merchant codes
Review of duplicate accounts and SSN mismatches
GAO and DoDIG review of CBAs
Review of CBA limits and procedures
Identification of future requirements and capabilities

                                                              18
                      Travel Card Actions

                                Yellow
GSA Notice:
TC-5 Expand Salary Offset – Civilian Retirees   File matching
       85 potential cases since FY99            restriction

FMR Changes:
TC-11 Strengthen Compliance Language            FMR changes
TC-17 Terminating Access to EAGLS               FMR change

Other Actions:
TC-9 Control Mechanisms in DTS                  Interface with
      Activation/deactivation                   BoA & future
      Balance information                       release




                                                             19
                                                   Travel Card Performance

Individually Billed Accounts - Percent of Dollars Delinquent

                                  20
                                  18
        % of Dollars Delinquent




                                  16
                                  14
                                  12
                                  10
                                   8
                                   6
                                   4
                                   2
                                   0
                                       Jan 01   Jul 02   Aug 02 Sep 02 Oct 02 Nov 02 Dec 02   Jan 03   Feb 03   Mar 03 Apr 03 May 03 Jun 03       Jul 03
 DoD                                   18.35     8.1      8.5    7.3    7.9     8.1    8.3     11.5     7.5      5.7    5.3     5.3    4.8         5.1
 Other Federal Agencies                13.08     6.1      3.8    4.2    4.6     4.7    6.7     8.6      5.4      4.2    3.3     2.9    2.2
 Goal                                   4.5      4.5      4.5    4.5    4.5     4.5    4.5     4.5      4.5      4.5    4.5     4.5    4.5         4.5

                                                                                                                                             20
                                                  Travel Card Performance

Centrally Billed Accounts - Percent of Dollars Delinquent
       % of Dollars Delinquent




                                 15.0

                                 10.0

                                  5.0

                                  0.0   Jan 01   Jun 02   Jul 02   Aug 02 Sep 02   Oct 02   Nov 02 Dec 02   Jan 03   Feb 03   Mar 03   Apr 03 May 03 Jun 03
DoD                                      14.3     0.8      0.4      1.9     1.3     1.5      0.6     1.5     2.6      2.2      1.1      2.3     0.9    0.9
Other Federal Agencies                   9.8      2.7      0.7      1.1     3.1     0.6      3.0     1.3     1.8      1.8      0.7      1.4     1.2    1.2
Goal                                              3.0      3.0      3.0     3.0     3.0      3.0     3.0     3.0      3.0      3.0      3.0     3.0    3.0



                                                                                                                                                  21
                  Purchase Card Performance

      $Millions
                              Purchases
900                                                               FY 02 - $6.757B
                                                        3rd   Qtr FY 03 - $5.022B
800
700
600                                                           Army
500                                                           Air Force
400                                                           DoD Agencies
                                                              Navy
300
200
100
  0
        1st       2nd   3rd   4th   1st   2nd     3rd
        Qtr       Qtr   Qtr   Qtr   Qtr   Qtr     Qtr
                   FY 02                  FY 03
                                                                           22
               Purchase Card Performance

       Thousands
                      Transactions
1400                                                         FY 02 – 10.98 M
                                                   3rd Qtr   FY 03 – 7.76 M
1200
1000
                                                             Army
800                                                          Air Force
                                                             DoD Agencies
600
                                                             Navy
400
200
  0
         1st   2nd   3rd   4th   1st   2nd   3rd
         Qtr   Qtr   Qtr   Qtr   Qtr   Qtr   Qtr
                   FY 02                FY 03
                                                                       23
            Purchase Card Performance

 Percentage of Maximum Rebate Earned
100
                                                        FY 02 - $35.8M
 90                                             3rd Qtr FY 03 - $29.1M
 80
 70
                                                   Army
 60
                                                   Air Force
 50
                                                   DoD Agencies
 40                                                Navy
 30
 20
 10                                             Potential Rebates
  0                                              FY 02 - $60.1M
      1st   2nd   3rd   4th   1st   2nd   3rd    FY 03 - $44.8M
      Qtr   Qtr   Qtr   Qtr   Qtr   Qtr   Qtr
             FY 02                  FY 03
                                                                 24
New Initiatives




                  25
     June 19-20 Best Practices Presentations


 Defense Medical Logistics Standard Support (DMLSS)
 DoD EMALL
 Air Force Advantage Pilot
 Air Force Purchase Log
 Army Materiel Command Purchase Card Management System (PCMS)
 Defense Travel System
 Purchase Card Automated Review Transaction Tool (PCARTT) Pilot
 PowerTrack Transportation
 NIMA
Results:
 “Reconciliation” Is Broader Than Just Financial Reconciliation
 DoD Is Redundantly Trying to Solve the Same Problems
                                                                   26
              Purchase Card Feedback Cycle

                                   Card
                               Authorization,
                               Issuance, and
                                                      Controls
     Improved Controls
                                Maintenance



                                Property
                                Logistics
Data Mining     Usage data &                           Items     Purchasing
                                •Demand Data
                Issues                               Purchased
                                •Transportatio
                                n

                                            Strategic Sourcing



     Costs and Budget             Payment               Validation

                                                                         27
            Redesigned Charge Card Capability
                     Project Phases


Phase I Requirements Definition (July 2003)
      Deployed Data Mining Pilot as Rapid Prototype
      Define and Segment Capabilities Required
      Baseline Existing Capabilities (In Process)
      Develop Gap Analysis and Identify Feasibility Pilots
      Define Interoperability Constraints
      Develop Notional Business Case for Concept of Operations
      Review and Leverage BMSI Architecture


Phase II Explore Alternative Capability and
  Implementation Solutions (October 2003)
    Develop/Deploy Pilots to Determine Feasibility of Specific Segment
     Solutions
    Explore Commercial Solutions
    Develop Business Cases where Appropriate
    Identify Outsourcing Opportunities

                                                                   28
           Redesigned Charge Card Capability
                    Project Phases



Phase III Determine Architecture (March 2004)
    Assess Pilot Capabilities, Commercial Solutions, Outsourcing
    Develop Integration Strategy


Phase IV Implement – Deploy and Operational
  Capability (October 2006)




                                                                    29
           Operational Challenges



PC-PMO Focus


Electronic Processing of Rejects
   DFAS
   Bank



Acceptance of Credits to Accounting Systems
   DFAS



                                               30
         Operational Challenges


Processing Contract Payment thru EDI
   OSD(C)


GPC Contract Payments (e.g., Large Ticket Items)
   Banks
   Visa/MasterCard


Property Receipt, Unique Identification and
Transportation


                                               31
                       Next Steps


Work with Business Enterprise Architecture to -
    Refine Capability Requirements
    Address Operational Challenges and Schedule
    Develop Timeline for Pilots
    Refine Performance Measures
    Continue Meeting as a Working Group (Virtually When
     Possible)
    Develop DoD Organization Self-Certification Checklist for
     Program Internal Controls

Establish Joint Implementation Requirements Board
    Evolved from Charge Card IPT


                                                                 32
            Joint Implementation Requirements Board
                Notional Structure for Discussion
                                                  Senior Focus Group



                           Charge Card IPT / Joint Implementation Requirements Board

  Meet
Quarterly
              Data Mining Transaction Analysis
              Co-Chaired by DoD TC PMO + DoD PC PMO
                 Group Management is part of job duties     Property                 Financial    Card
                                                             Trans-         Travel   Manage-     Maint-
              Participants:     Future Participants:                         DTS
                                  Air                       portation                  ment      enance
                 PowerTrack
                 DTS              Fleet
                 Services         Transportation
                                  Other Federal Agencies



                Fraud Focus Group
                Members:                                    Bank Advisory Group
 Meet                                                       Members:
                  DMDC
 Twice                                                         GSA
                  IG
  Per                                                       Banks
                  DCIS
 Year                                                       Bank Associations
                  DFAS-IR




                 Service Metrics


                                        Integrated Data Environment                               33
        This is Your Chance!

As we work toward the next generation charge
card functionality, what functions currently
performed by A/OPCs do you recommend for
possible outsourcing? What functions should be
retained? Are there new functions that should be
added?

What do you believe could be done to improve the
Purchase Card Program now and in the future?




                                                   34
This is Your Chance!




   Questions?

                       35

				
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