House Rules Changes Affecting Floor Proceedings in the 116th Congress (2019-2020)

Summary: As agreed to in the House, H.Res. 6 , a resolution adopting the rules of the House of Representatives, provided amendments to the rules, as well as separate orders, that affect floor procedure in the 116 th Congress (2019-2010). These amendments changed procedures in the full House and in the Committee of the Whole.

Summary: The rules changes altered when a resolution that would cause a vacancy in the Office of Speaker would qualify as a question of privilege. Under a new provision to clause 2 of Rule IX, resolutions declaring a vacancy of the chair are not privileged unless they are offered by direction of a party caucus or conference.

Summary: H.Re s. 6 established a Consensus Calendar for the consideration of certain broadly supported measures that have not been reported by their committees of primary jurisdiction. One rules change allows the Speaker to schedule consideration of legislation that has been on the Private Calendar for seven days. Another change requires the Speaker to schedule the consideration of a motion to discharge that has garnered the necessary 218 signatures to be placed on the Discharge Calendar (and has been on that calendar for at least seven legislative days). Prior to the rules change, measures on the Private Calendar and motions on the Discharge Calendar were to be considered on specified days of the month.

Summary: The 116 th rules package mandates that certain legislative texts must be available to the public for 72 hours before legislation can be raised on the House floor. The earlier rules provided a three-day layover, not including weekends and holidays, which could provide a review period of fewer or more than 72 hours.

Summary: Rules changes allow the Speaker to postpone votes on amendment votes that occur in the House proper and no longer require a notice that a voting period on the amendment will be reduced to five minutes. In the Committee of the Whole, the chair is afforded greater flexibility to reduce voting periods to two minutes on record votes.

Summary: Several rules changes concerned the five Delegates and the Resident Commissioner of Puerto Rico. Most significantly, H.Res. 6 enables these individuals to vote in the Committee of the Whole. The 116 th rules reinstated the policy from previous Congresses that allowed for voting in the Committee of the Whole but also mandated a revote in the House proper if the initial vote was decided within the margin of votes cast by the Delegates and the Resident Commissioner.

Summary: The 116 th rules package clarified that the provision in Rule XVII that bans hats in the House chamber allows Members to wear "religious headdress." In the 116 th Congress, Members can wear religious head coverings in the chamber at any time.

Summary: Finally, H.Res. 6 included a separate order governing action in the 116 th Congress that clarified procedures concerning measures introduced pursuant to the War Powers Resolution. The separate order stated that motions to discharge such measures from committee would not be subject to a motion to table.

In January 2019, the House agreed to H.Res. 6 , a resolution adopting the rules of the House of Representatives for the 116 th Congress. This report summarizes amendments to House rules affecting floor proceedings in the 116 th Congress (2019-2020), as provided for in H.Res. 6 .

In the 116 th Congress, rules changes affected the consideration of legislation on the floor, voting in the House and the Committee of the Whole, and procedures related to Delegates and the Resident Commissioner of Puerto Rico. H.Res. 6 also clarified that religious headdress may be worn in the House chamber at any time, and it included a separate order specifying that, during the 116 th Congress, the House may not table motions to discharge certain measures related to the War Powers Resolution.

"Question of the Privileges of the House" Resolution Causing a Vacancy in the Office of the Speaker

H.Res. 6 amended Rule IX to establish that a resolution declaring a vacancy in the Office of the Speaker will not qualify as a question of the privileges of the House unless it is offered by direction of a party caucus or party conference. Prior to this rules change, such a resolution offered by any Member would have qualified as a question of privilege.

Rule IX concerns resolutions "raising a question of the privileges of the House." Resolutions raising a question of the privileges of the House are those that affect the "rights of the House collectively, its safety, dignity, and the integrity of proceedings." If they are offered from the floor by the majority leader or the minority leader, they have precedence over all other questions except the motion to adjourn. When offered by other Members, they have the same precedence but only at a time scheduled by the Speaker within two legislative days after the proponent announces an intention to offer the resolution.

The Consensus Calendar is an addition to House rules. It is a list of certain measures that have not been reported by their committees of primary jurisdiction yet have at least 290 cosponsors. The new clause 7 of Rule XV states that, except at the start and the end of a Congress, the House must consider a measure on the Consensus Calendar designated by the Speaker each week should one or more be listed and the House is in session. The Consensus Calendar might provide an opportunity to vote on unreported, broadly supported legislation that would not otherwise be chosen by the Speaker for consideration under suspension of the rules or made in order by a resolution from the Rules Committee.

In order to be placed on the Consensus Calendar, a non-reported measure must first achieve the 290-cosponsor threshold (two-thirds of the House's full membership). At that time, the measure's sponsor may present a motion to the Clerk to place the measure on the calendar. This motion is submitted in writing directly to the Clerk, as opposed to being offered on the floor. The written motion is then retained in the Clerk's custody and printed in the Congre ssional Record . The rule directs the Clerk to maintain a list of Consensus Calendar motions and make the list publicly available on the Clerk's website.

Following the presentation of the motion, a measure will be placed on the Consensus Calendar once it has maintained 290 cosponsors for a "cumulative period of 25 legislative days," a period of time that is usually equal to 25 calendar days in which the House is in session. (If the primary committee reports the measure during this period, the motion to place the measure on the Consensus Calendar will be considered withdrawn. ) The measure will remain listed on the calendar even if it falls below the 290-cosponsor threshold until it is considered by the House or is reported by the primary committee of jurisdiction. Thus, a committee may report a bill to prevent it from being placed on the Consensus Calendar or to remove it from the Consensus Calendar.

The new rule did not create any special procedures for the floor consideration of a measure on the Consensus Calendar. According to the Section-by-Section summary of the rules changes prepared by the Rules Committee, Consensus Calendar measures may be considered "in any manner otherwise available under the rules," which would include suspension of the rules or under the terms of a special rule reported by the Committee on Rules. The Section-by-Section summary also explains that the Speaker will meet the requirement of the rule that a measure on the Consensus Calendar be designated for consideration by making an announcement immediately preceding the consideration of a measure on the floor.

H.Res. 6 amended clause 2 of Rule XV to require the Speaker to schedule consideration of a motion to discharge that has met the signature and layover requirements of Rule XV within two legislative days after a discharge proponent announces his or her intention to offer the motion. In previous Congresses, motions to discharge, which had met the Rule XV requirements, could be offered on the floor on the second and fourth Mondays of the month if the House was in session on those days.

The "discharge rule" enables an unreported measure that has not been scheduled by leadership for floor consideration to be raised on the floor, provided that a majority of the House membership has signed a discharge petition. Any Member may submit to the Clerk a motion to discharge a committee from the consideration of a public measure that the committee has had before it for 30 legislative days or more. A Member may also submit a motion to discharge the Committee on Rules from the consideration of a special order of business (special rule) it has had before it for seven legislative days or more if the measure the rule makes in order has been in committee for at least 30 legislative days or has been reported. Once a majority of the House membership (218 Members) signs the associated discharge petition, the motion is placed on the Calendar of Motions to Discharge Committees. After the motion has been on the calendar for at least seven legislative days, a Member who has signed the discharge petition may announce to the House an intention to offer the motion.

As amended, clause 2(c)(1) of Rule XVI now requires the Speaker to schedule motions to discharge the day of the announcement or on one of the next two legislative days. Prior to the change, even after meeting all the other requirements, motions to discharge could be made only on the second and fourth Mondays of a month. If the House was not in session on those days, considerable time could pass between when the other requirements of the rule were met and when proponents could force consideration of their motion.

The Private Calendar lists private legislation (measures providing benefits to one or more specified individuals or entities) that has been reported out of committee. House Rule XV provides a special procedure for the consideration of private legislation on the calendar, but in recent Congresses, few measures have been called from the Private Calendar. H.Res. 6 . amended clause 5 of Rule XV to allow the Speaker to direct the Clerk to call a private bill on any day the House is in session if the measure has been on the Private Calendar for seven days. Prior to the 116 th Congress, the call of the Private Calendar was limited to the first and third Tuesdays of the month.

If measures are listed on the calendar, the Speaker or designee is to direct the Clerk to call them on the first Tuesday of the month in the order they are listed. Under the amended rule, the Speaker may also direct the Clerk to call a specific measure on other days after the requisite seven-day period has passed. In the latter case, the Speaker must announce to the House an intention to call a private measure. The call, if it is to occur, must occur on the second legislative day after the legislative day the Speaker makes the announcement.

Official Objectors are appointed by each party to examine measures on the Private Calendar. If, at the time a bill is called, two Objectors or two other Members object to the measure, the measure is recommitted to the committee that reported it. According to the Rules Committee's summary of H.Res. 6 , the specific requirement for two days' notice ensures that the "Official Objectors are able to be on the Floor at the appropriate day and time."

House rules generally afford a time period for Members to review legislative text before considering measures in the chamber. H.Res. 6 . amended Rules XXI, XXII, and XXII to establish, for certain legislative text and committee reports, a 72-hour review period, as opposed to the previous review period, which spanned until the "third calendar day" on which the measures' text or committee reports had been available. The rules amendments actually made two changes: they designated the 72-hour period and, for reported measures, enabled the layover period to begin when the "proposed text of each report" is made available, in contrast to when the official committee report is available.

Prior to the changes to the rules, legislative text could meet the three-day layover requirement even if it was not always available for a 72-hour period. For instance, if an unreported bill's text was posted at 9:00 p.m. on a Monday, the bill might have been considered on Wednesday morning, less than 40 hours later. The new 72-hour availability requirement, however, provides an exact time period for layover review before measures may be considered in the House.

The requirement applies to proposed text of committee reports and the text of unreported bills and joint resolutions, conference reports, and amendments reported in disagreement from conference committees. The review period begins at the time the text is posted electronically or otherwise made available. Thus, for committee reports, the clock can start with the posting of the report's proposed content, not when the committee has filed and delivered the report to the Clerk, which may occur at a later time.

As stated in clause 4 of Rule XIII, the availability requirement excludes supplemental, minority, additional, or dissenting views that may be inserted in a committee report at the request of a committee member. Members are guaranteed two calendar days to submit these optional sections if notice of intent to file supplemental views was given at the time the committee approved the measure or matter.

H.Res. 6 amended clause 8 of Rule XX to enable the Speaker to postpone a vote on any amendment considered in the House rather than restricting this action to amendments reported from the Committee of the Whole. Votes on the previous question to end debate on any amendment can now be postponed as well. Prior to the rules change, the rule referred only to amendments reported from the Committee of the Whole. Since 1979, House rules have allowed the Speaker to postpone and cluster votes by electronic device. In addition to amendments, several types of measuresâincluding bills, resolutions, and conference reportsâmay be subject to a postponed vote. The Speaker's ability to postpone, cluster, and announce upcoming votes provides some degree of certainty to the voting schedule.

Discretion for Five-Minute Votes (House)

Under clause 2 of Rule XX, the time for electronic voting is no less than 15 minutes in the House. However, clauses 8 and 9 provide the Speaker with the discretion to reduce to five minutes the voting period in the House if the vote occurs following another electronic vote or following a report from the Committee of the Whole. In previous Congresses, clause 9 stated that the reduced-time option could be exercised if "notice" was given of possible five-minute voting.

According to the amended clause 9(a), the Speaker may reduce the voting period if "in the discretion of the Speaker Members would be afforded an adequate opportunity to vote," while clause 9(b) states, "To the maximum extent practicable, notice of possible five-minute voting for a given series of votes shall be issued prior to the first electronic vote in the series."

Discretion for Two-Minute Votes (Committee of the Whole)

The 116 th rules package amended clause 6 of Rule XVIII to provide the chair of the Committee of the Whole with more discretion to reduce the time for electronic voting. Under clause 2 of Rule XX, the time for electronic voting is no less than 15 minutes in the Committee of the Whole. However, clause 6 of Rule XVIII allows the chair to reduce the voting period to not less than two minutes if the vote occurs in a series. In previous Congresses, the two-minute vote on any proposed question was to occur immediately following the initial 15-minute vote or after the Committee of the Whole resumes. There could be no intervening business or debate.

H.Res. 6 removed references to intervening business or debate. Instead, clause 6 now authorizes a two-minute voting period "if in the discretion of the chair Members, Delegates, and the Resident Commissioner would be afforded an adequate opportunity to vote."

H.Res. 6 expanded the number of position categories allowed entrance to the Chamber when the House is in session. Under the amended clause 2 of Rule IV, the list of individuals eligible for floor privileges now explicitly includes Delegates-elect, the Resident Commissioner-elect, and contestants in elections for Delegate and the Resident Commissioner "during the pendency of their cases on the floor." Clause 2 also states that, in addition to governors of the states, governors of the territories shall "be admitted to the Hall of the House or rooms leading thereto."

During any recess or adjournment of not more than three days, the Speaker, in consultation with the minority leader, may change the time or the location of the next meeting of Congress if circumstances warrant it. The rule granting the Speaker this authority contains notification requirements. H.Res. 6 added, "Delegates and the Resident Commissioner" to the requirements in clause 12 of Rule 1 that "Members" be notified of a change in the time of the next meeting.

H.Res. 6 reinstated from previous Congresses the voting rights of the Delegates and the Resident Commissioner in the Committee of the Whole. It also re-instated the rules provision that prevents these votes from influencing the final outcome of questions initially decided in the committee. In the 116 th Congress, recorded votes in the Committee of the Whole, which are decided within the margin of the votes cast by the Delegates and the Resident Commissioner, are to be re-conducted in the House, a forum in which Delegates and the Resident Commissioner do not have voting rights.

As amended, clause 3(a) of Rule III states that in the Committee of the Whole, the Delegates and the Resident Commissioner "shall possess the same powers and privileges as Members of the House." The term powers and privileges includes the ability to vote.

In the 103 rd Congress (1993-1994), Delegates and the Resident Commissioner first received the power to vote in the Committee of the Whole. Since then, their voting status has changed with each change in the majority party. Accordingly, they voted during the 103 rd , 110 th (2007-2008), and 111 th (2009-2010) Congresses, when the Democrats held the majority in the House, but not the 104 th -109 th Congresses (1995-2006) and the 112 th -115 th Congresses (2011-2018), when the Republicans held the majority.

During the Congresses in which the Delegates and the Resident Commissioner voted in the Committee of the Whole, the House adopted the associated marginal vote provision under what is now clause 6 of Rule XVIII. That is, if a question is decided in the Committee of the Whole within the margin of votes cast by the Delegates and the Resident Committee, the committee shall rise. The Speaker shall then put the question to the House. After the House votes, the Committee of the Whole shall resume its sitting.

Counting for Quorum and Other Procedures

The 116 th Congress rules package enabled Delegates and the Resident Commissioner to be counted when ascertaining the presence of a quorum, as well as toward the requisite number to request a recorded vote, in the Committee of the Whole. In addition, the chair was to consider the Delegates' and Resident Commissioner's opportunity to vote before reducing the minimum time for electronic voting.

H.Res. 6 amended clause 6 of Rule XVIII to add the phrase Delegates and the Resident Commissioner after the word Members in three places. Consequently, a quorum in the committee became 100 Members, Delegates, and the Resident Commissioner. A request for a recorded vote needs the support of at least 25 Members, Delegates, and the Resident Commissioner. And the chair may reduce the time to vote on any postponed question "if in the discretion of the Chair Members, Delegates, and the Resident Commissioner would be afforded an adequate opportunity to vote."

H.Res. 6 amended clause 5 of Rule XVII to clarify that Members may wear religious headdress in the House chamber. The amendment added the phrase non-religious headdress to clause 5 in order to specify that the hat prohibition did not include religious headwear. Clause 5 now states, "During the session of the House, a Member, Delegate, or Resident Commissioner may not wear non-religious headdress or a hat."

The 116 th Congress rules package included a section on "separate orders," which are provisions that affect House procedures but are not codified in the standing rules of the House. These separate orders have the same force and effect as House rules. Under one such separate order, H.Res. 6 clarifies that the House may not table a motion to discharge a measure introduced pursuant to Section 6 or Section 7 of the War Powers Resolution ( P.L. 93-148 ).

The War Powers Resolution is an act that governs House consideration of joint resolutions, bills, and concurrent resolutions that are introduced after the U.S. Armed Forces engages "in hostilities" without a prior declaration of war. Measures introduced in compliance with the resolution are referred to the House Foreign Affairs Committee. The committee is to report such legislation within a time frame delineated in the resolution.

The War Powers Resolution does not provide an automatic discharge process if the committee does not report. Should the measure not be reported, a Member may offer a motion to discharge the committee from further consideration in order to allow it to reach the floor. According to the Rules Committee summary for H.Res. 6 , previous House action on similar procedures "made it unclear" if a Member could then offer a motion to table the motion to discharge. The separate order is intended "to provide certainty for all Members, Delegates, and the Resident Commissioner on this procedure."


Misuse of Government Purchase Cards: Background, Legislation, and Analysis

Summary: Following their introduction in the mid-1990s, the usage of government purchase cards expanded at a rapid rate. Spurred by legislative and regulatory reforms designed to increase the use of purchase cards for small acquisitions, the dollar volume of government purchase card transactions grew from $527 million in FY1993 to $19.5 billion in FY2011. While the use of purchase cards was credited with reducing administrative costs during that time, audits of agency purchase card programs found varying degrees of waste, fraud, and abuse. One of the most common risk factors cited by auditors was a weak internal control environment: many agencies failed to implement adequate safeguards against card misuse, even as their purchase card programs grew.

Summary: In response to these findings, Congress passed the Government Charge Card Abuse Prevention Act of 2012 (Charge Card Act; P.L. 112-194 ), which sought to enhance the management and oversight of agency purchase card programs. Drawing on recommendations from the Government Accountability Office (GAO), the Charge Card Act required executive branch agencies to implement a specific set of internal controls, establish penalties for employees who misuse agency purchase cards, and conduct periodic risk assessments and audits of agency purchase card programs.

Summary: This report begins by providing background on the origin and structure of agency purchase card programs. It then discusses identified weaknesses in agency purchase card controls that have contributed to card misuse, and examines provisions of the Charge Card Act that are intended to address those weaknesses. Finally, the report examines implementation of the Charge Card Act and analyzes ongoing risks to agency purchase card programs.

The government's purchase card program has its origins in Executive Order (E.O.) 12352, issued by President Ronald Reagan in 1982. E.O. 12352 directed agencies to develop programs that simplified procedures and reduced the administrative costs of procurement, particularly with regard to "small" purchases ($25,000 or less). Several agencies subsequently participated in a pilot program that evaluated the use of a commercial credit card, called a purchase card, as an acquisition tool. At the time, even a routine order for widely available items, such as office supplies, typically required agency program staff to submit a written procurement request to a contracting officer, who reviewed it, obtained the necessary signatures, made the actual purchase, and processed the associated paperwork. To critics, this process was inefficient, especially for small purchases. Not only was it time-consuming for both program and procurement personnel, but it also prevented program offices from quickly filling immediate needs. Under the pilot program, nonprocurement staff used purchase cards to conduct small-dollar transactions directly with local suppliers, thus bypassing procurement officers entirely. A report on the pilot program concluded that purchase cards could reduce administrative costs and improve delivery time, and in 1989 the Office of Management and Budget (OMB) tasked the General Services Administration (GSA) with making purchase cards available government-wide.

Participation in GSA's purchase card program was not mandatory, and card use did not initially grow as rapidly as some had expected. In 1993, however, a report issued by the National Performance Review (NPR) sparked a number of legislative and regulatory reforms intended to increase purchase card use. The NPR was a Clinton Administration initiative that sought to "reinvent" the federal government by making government operations both less expensive and more efficient. One of the NPR's objectives was to identify opportunities to streamline a number of government-wide processes, including procurement. Drawing on input from experts in the public and private sectors, the NPR's initial report recommended expanding the use of purchase cards across the government, a step it said would "lower costs and reduce bureaucracy in small purchases." In a separate report that focused solely on procurement, the NPR estimated that if half of all small acquisitions were made using purchase cards, the government would realize $180 million in savings annually. The report further recommended amending the Federal Acquisition Regulation (FAR)âthe government's primary source of procurement guidanceâto promote the use of purchase cards for small purchases.

Building on the NPR's recommendations, Congress passed the Federal Acquisition Streamlining Act (FASA; P.L. 103-355 ) in 1994. FASA introduced several reforms that increased the use of purchase cards. Among these, Title IV of FASA established a simplified acquisition threshold (SAT) of $100,000 (increased to $250,000 in 2017). Purchases at or below the threshold were exempted from the provisions of a number of procurement laws. This reform obviated the need for procurement officials to make small purchases. To further streamline procedures for the smallest acquisitions, Title IV also established a "micro-purchase" threshold of $2,500 (which was increased to $3,000 in 2006, and again to $10,000 in 2017). FASA further exempted micro-purchases from sections of the Buy American Act and the Small Business Act, and they could be made without obtaining a competitive bid, if the cost was deemed reasonable by the cardholder.

At the same time, the Clinton Administration took steps to increase the use of purchase cards. Citing the need to make agency procurement procedures "more consistent with recommendations of the National Performance Review," President Clinton issued Executive Order 12931 on October 13, 1994. E.O. 12931 directed agency heads to (1) expand purchase card use; and (2) delegate the micro-purchasing authority provided in FASA to program offices, which would enable them to make purchases whose value did not exceed the micro-purchase threshold. E.O. 12931 also directed agency heads to streamline procurement policies and practices that were not mandated by statute, and to ensure that their agencies were maximizing their use of the new simplified acquisition procedures. In addition, the FAR was amended in 1994 to designate the purchase card as the "preferred method" for making micro-purchases.

Card use increased sharply as agencies implemented these reforms. The dollar value of goods and services acquired with purchase cards increased from $527.0 million in FY1993 to $19.5 billion in FY2011. During that same time span, the number of cardholders nearly tripled to 278,000, and the number of purchase card transactions increased from 1.5 million to just under 22.8 million in FY2011. The flexibility of the purchase card may have contributed to its growth: it could be used for in-store purchases, which allowed the cardholder to take immediate possession of needed goods, or it could be used to place orders by telephone or over the internet and have goods delivered. According to GSA, the use of purchase cards now saves the government $1.7 billion a year in administrative costs.

The federal purchase card program is implemented by individual agencies, with the involvement of GSA and OMB. In broad terms, agencies establish and maintain their own programs, but they select pu rchase card services from contracts that GSA negotiates with selected banks, and their programs must conform to the government-wide guidance issued by OMB.

Each agency is responsible for establishing its own purchase card program. The agency, within the framework of OMB guidance, establishes internal rules and regulations for purchase card use and management, decides which of its employees are to receive purchase cards, and handles billing and payment issues for agency purchase card accounts. Two levels of supervision generally exist within an agency's purchase card program. Individual cardholders are assigned to an Approving Official (AO). The AO is considered the "first line of defense" against card misuse, and agency policies often require the AO to ensure that all purchases comply with statutes, regulations, and agency policies. To that end, the AO is responsible for authorizing cardholder purchases, either by approving purchases before they are made or by verifying their legitimacy through reviews of cardholder statements and supporting documentation, such as receipts. The AO may also be required to ensure that statements are reconciled and submitted to the billing office in a timely manner.

Each agency also appoints an Agency Program Coordinator (APC) to serve as the agency's liaison to the bank and to GSA. At some agencies, each major component has an APC, one of whom is chosen to serve as the agency's liaison. The APCs are also usually responsible for agency-wide activities, such as developing internal program guidelines and procedures, sampling cardholder transactions to identify fraudulent or abusive purchases, setting up and deactivating accounts, and ensuring that officials and cardholders receive proper training.

GSA's primary responsibility is to award and administer contracts with card vendors on behalf of the government. In November 1998, agency purchase card programs began operating under GSA's SmartPay initiative. SmartPay permitted agencies to select a range of credit card products from five banks with which GSA had negotiated contracts. The SmartPay contracts established prices, terms, and conditions for credit card products and services from these five banks. Purchase cards were established as centrally billed accounts under the contracts, which meant that agencies, and not individual cardholders, were billed for purchases. The contracts required agencies to make payment in full at the end of each billing cycle. New purchase card contractsâknown collectively as SmartPay2âtook effect government-wide in November 2008. In November 2018, all federal agencies began operating under SmartPay3 contracts.

OMB issues charge card management guidance that all agencies must follow. This guidance, located in Appendix B of OMB Circular A-123, establishes agencies' responsibilities for implementing their purchase, travel, and fleet card programs. Chapter 4 of Appendix B identifies the responsibilities of charge card managers in developing and implementing risk management controls, policies, and practices (often referred to collectively as "internal controls") that mitigate the potential for charge card misuse. Agency charge card managers must ensure that

cardholder statements, supporting documentation, and other data are reviewed to detect delinquency and misuse; key duties are separated, such as making purchases, authorizing purchases, and reviewing and auditing purchase documentation; records are maintained for training, appointment of cardholders and authorizing officials, cardholder purchase limits, and related information; disciplinary actions are initiated when cardholders or other program participants misuse their cards; appropriate training is provided for cardholders, approving officials, and other relevant staff; employees are asked about questionable or suspicious transactions; and charge card statement reconciliation occurs in a timely manner.

Chapter 4 also identifies administrative and disciplinary actions that may be imposed for charge card misuse, such as deactivation of employee accounts, and it requires managers to refer suspected cases of fraud to the agency's Office of Inspector General or the Department of Justice.

Circular A-123 provides OMB with oversight tools by requiring agencies to submit to OMB each year a charge card management plan that details their efforts to implement and maintain effective internal controls and minimize the risk of card misuse and payment delinquency. It also requires agencies to report the number of AOs it has appointed, the average number of monthly purchase card transactions each AO reviews, the number of reported cases of misuse, and the number of disciplinary actions taken in response to misuse.

Audits of agency purchase card programs conducted by the Government Accountability Office (GAO) and agency inspectors general (IGs) through FY2011 attracted congressional attention with their revelations of abusive purchases made by government employees. Among the many cases of abuse cited by auditors were a Department of Agriculture (USDA) employee who, over a period of six years, used her purchase card to funnel $642,000 to her boyfriend; a Forest Service employee who charged $31,342 to his purchase card for personal items, including Sony PlayStations, cameras, and jewelry; and a Coast Guard cardholder who used his purchase card to buy a beer brewing kitâand then brewed alcohol while on duty. Congress held several hearings to address purchase card misuse and the underlying internal control weaknesses that auditors said allowed it to occur. The following section examines the weaknesses identified in audit reports published between 2002 and 2011, which highlight the issues that led to the passage of the Charge Card Act.

Ineffective Transaction Review and Approval Processes

One of the primary safeguards against improper use of government purchase cards is the review and approval of cardholder transactions by someone other than the cardholder. As noted, purchase card AOs are usually responsible for reviewing the cardholder's monthly statement. Given that the AO is often the only person other than the cardholder to assess the validity of a purchase before payment is made to the purchase card vendor, the review and approval process is considered one of the most critical components of an agency's purchase card control environment. Steven Kutz, GAO's Managing Director of Forensic Audits and Special Investigations, stated in testimony before the Senate,

Basic fraud prevention concepts and our previous audits of purchase card programs have shown that opportunities for fraud and abuse arise if cardholders know that their purchases are not being properly reviewed.

Despite the importance of the AO's role in preventing and detecting improper purchases, some agencies failed to ensure that cardholder statements were carefully reviewed prior to their approval. At the Department of Education, auditors estimated that 37% of monthly cardholder statements they reviewed had not been approved by the AO. GAO also estimated that nearly one of every six purchase card transactions government-wide had not been properly authorized.

Even when AOs did conduct reviews, they sometimes failed to meet government standards. Agencies are required by OMB to ensure that cardholder statements are compared with supporting documentation, such as invoices and receipts, as part of the review process. This is necessary because purchase card statements are rarely itemized; they usually provide only the store or contractor name and the amount charged. For AOs, receipts and invoices are the principal means of verifying what items were purchased and determining whether those items were for legitimate program purposes. According to GAO, many agencies have not ensured that supporting documentation is available and examined as part of the review and approval process. An audit of the Department of Housing and Urban Development's (HUD's) purchase card program found that the agency did not have adequate documentation for 47% of transactions auditors deemed questionableâpurchases from merchants that are not normally expected to do business with HUDâwhich meant auditors "were unable to determine what was purchased, for whom, and why." Similarly, an audit of the Veterans Health Administration's (VHA's) purchase card program estimated that $313 million of its transactions lacked key supporting documentation.

One consequence of these weaknesses was that fraudulent and abusive transactions slipped through the review process unnoticed. For instance, GAO found that AOs at agencies across the government approved cardholder statements that included questionable transactions, such as purchases of jewelry, home furnishings, cruise tickets, electronics, and other consumer goods. At the Forest Service, one employee used her purchase card over a period of years to accumulate more than $31,000 in jewelry and electronics. Similarly, HUD cardholders spent $27,000 at department stores like Macy's and J.C. Penney in a single year. In one egregious case, a Federal Aviation Authority (FAA) employee had his statement approved even though it showed he violated agency policy by charging cash advances to his purchase cardâwhile at a casino.

The lack of adequate oversight is also evident where AOs have approved duplicate transactionsâvendors charging the government twice for the same goods or servicesâand purchases made by someone other than the cardholder. One audit identified an estimated $177,187 in duplicate charges at one agency. An audit at FAA discovered that a cardholder had allowed unauthorized individuals to charge over $160,000 to her purchase card account. When an AO identifies unauthorized and duplicate transactions, the agency should use the process described in the SmartPay master contract to dispute the charges. When AOs fail to identify and dispute fraudulent charges, the government often pays them in full or fails to obtain a refund from the purchase card vendor.

GAO further found that many agencies failed to monitor and evaluate the effectiveness of their purchase card controls, a responsibility that is often assigned to the APC. Monitoring and evaluation may include sampling purchase card transactions for potentially improper purchases, ensuring purchase card policies are being properly implemented across the agency or component, and assessing program results. These duties are often unfulfilled. At FAA, for example, an audit found that APCs "generally were not" utilizing available reports to detect misuse and fraud, nor was the headquarters APC taking steps to assess the overall program. Similarly, an audit of the Forest Service purchase card program found that the agency's APCs failed to review sampled transactions for erroneous or abusive purchases, as required by USDA regulations.

Agencies are required to ensure that key procurement functions are handled by different individuals. When having goods shipped, for example, the same person should not approve and place the order, or place the order and receive the goods. At many agencies, however, the cardholder may perform two functions that should be separated, which increases the possibility that items may be purchased for personal use, lost, or stolen. In March 2008, GAO estimated that agencies were unable to document separation of duties for one of every three purchase card transactions. Three Navy cardholders ordered and received $500,000 of goods for themselves with their purchase cards before getting caught. In this way, inadequate separation of duties may result in millions of dollars of items that cannot be located. Items that are easily converted to personal useâcommonly referred to as "pilferable property"âare particularly vulnerable to loss and theft. The Department of Education, for example, could not account for 241 personal computers bought with purchase cards at a cost of $261,500. An audit of the Federal Emergency Management Agency's (FEMA's) spending on items related to hurricane recovery found that $170,000 worth of electronics equipment acquired with purchase cards had not been recorded in FEMA's property records and could not be found.

Given the complexities of federal procurement policies and procedures, training on the proper use and management of purchase cards is considered an important component of an agency's internal control environment. Through training, cardholders, approving officials, and program managers learn their roles in ensuring compliance with applicable regulations and statutes, and in reducing the risk of improper card use. To that end, OMB requires all agencies to train everyone who participates in a purchase card program. Cardholder training covers federal procurement laws and regulations, agency policies, and proper card use. Approving officials are required to receive the same training as cardholders, in addition to training in their duties as AOs. Program managers are required to be trained in cardholder and AO responsibilities, as well as management, control, and oversight tools and techniques. In addition, all purchase card program participants are supposed to complete their initial training prior to appointment (e.g., becoming a cardholder, or being designated as an AO or program manager) and receive refresher training at least every three years.

Agency audits published between 2002 and 2011 revealed a number of agencies had not fully implemented OMB's training requirements. A report by the inspector general at the Department of the Interior (DOI), for example, noted that DOI had not provided any training to its AOs, and concluded that many of those officials were not performing adequate reviews. The AOs themselves reportedly said that they did not know how to conduct a proper review of purchase card transactions, or how and why to review supporting documentationâboth subjects that are normally included in AO training.

Similarly, an audit at FAA concluded that the agency's failure to provide refresher training for cardholders and AOs may have contributed to violations of statutory sourcing requirements. The failure to comply with sourcing statutes, which require agencies to purchase certain goods and services from specified vendor categories, may undermine congressional procurement objectives. The Javits-Wagner-O'Day Act (JWOD), for example, requires the government to buy office supplies and services from nonprofits that employ blind and disabled Americans. Cardholder failure to comply with the provisions of JWOD and other sourcing statutes was widespread enough that GAO estimated that tens of millions of dollars of purchase card transactions may have been conducted with vendors other than the ones Congress intended.

Excessive Number of Cards Issued and High Credit Limits

The number of cardholders grew from under 100,000 in FY1993 to 680,000 in FY2000. After auditors expressed concerns that the government had issued too many credit cards and provided excessive credit limitsâfactors that raised the risk of card misuseâOMB issued a memorandum in April 2002 that required agencies to examine the number of purchase cards they issued and to consider deactivating all cards that were not a "demonstrated necessity." That same year, provisions in the Bob Stump National Defense Authorization Act for FY2003 ( P.L. 107-314 ) required the Department of Defense (DOD) to establish policies limiting both the number of purchase cards it issued and the credit available to cardholders. These reforms contributed to a net decrease of 392,000 government purchase cards between FY2000 and FY2011.

Despite this decrease in the total number of purchase card users, audits through FY2011 indicated that a number of agencies, including some with relatively large purchase card programs, did not establish appropriate controls over card issuance and credit limits. A 2006 GAO report on purchase cards at the Department of Homeland Security (DHS), for example, identified 2,468 cardholdersâabout 20% of all DHS cardholdersâwho had not made any purchases in over a year. Similarly, a congressionally directed audit of the Veterans Health Administration's (VHA's) $1.4 billion purchase card program found that VHA had issued cards with credit limits up to 11 times greater than the cardholders' historical spending levels, thereby exposing its program to unnecessary risk.

Government Charge Card Abuse Prevention Act

In response to these findingsâand evidence of similar abuse in agency travel card programsâCongress passed the Government Charge Card Abuse Prevention Act of 2012 (Charge Card Act; P.L. 112-194 ). The Charge Card Act established new internal control and reporting requirements for both purchase cards (Â§2), and travel cards (Â§3 and Â§4). The following paragraphs examine the Charge Card Act's requirements for purchase cards. Given that the Charge Card Act directly amends the U.S. Code, the requirements are identified by their location in code rather than in the act itself.

Statutory purchase card requirements for civilian agencies are located in a different title of the U.S. Code than those for DOD. The Charge Card Act therefore amended Title 41 to codify the civilian agency provisions and Title 10 to codify DOD's provisions. In addition, the Charge Card Act establishes similar, but not identical, requirements for civilian agencies and DOD.

Civilian Purchase Card Program Requirements

Section (2)(a)(1) of the Charge Card Act added civilian agency purchase card requirements to Chapter 19, Title 41, of the U.S. Code. The new requirements are found in 41 U.S.C. Â§1909(a) through (e).

41 U.S.C. Â§1909(a), Required Safeguards and Internal Controls, requires executive agencies to ensure

1. There is a record of each cardholder that includes the applicable limitations on single transaction and total transactions. 2. Each cardholder is assigned an AO other than the cardholder. 3. Each cardholder and AO are responsible for (a) reconciling the charges appearing on the cardholder's statements with receipts and other supporting documentation; and (b) forwarding a summary report to the certifying official. 4. Any disputed charges or discrepancies between the cardholder's receipts and bank statements are resolved in accordance with the terms of GSA's purchase card contract with the card issuer. 5. Payments on purchase card accounts are made by the prescribed deadlines to avoid interest penalties. 6. Rebates and refunds are reviewed for accuracy and recorded as receipts. 7. Records of each transaction are retained in accordance with record disposition policies. 8. Periodic reviews are performed to determine whether each cardholder needs a purchase card. 9. Appropriate training is provided to each purchase card holder and official responsible for overseeing purchase cards in the agency. 10. The agency has specific policies that establish the number of purchase cards issued by various component organizations and the authorized credit limits for those cards. 11. The agency uses effective systems, techniques, and technologies to identify illegal, improper, or erroneous purchases. 12. The agency invalidates the purchase card of each employee who (a) ceases to be employed by the agency, immediately upon termination, or (b) transfers to another unit of the agency, immediately upon transfer, unless both units are covered by the same purchase card authority. 13. The agency takes steps to recover the cost of any illegal, improper, or erroneous purchases made with a purchase card, including through salary offsets.

41 U.S.C. Â§1909(b), Guidance, requires the OMB Director to provide guidance on the implementation of the requirements of subsection (a).

41 U.S.C. Â§1909(c), Penalties and Violations, requires agencies to establish adverse personnel actions or other punishment for cases where a cardholder violates agency purchase card policies or otherwise makes illegal, improper, or erroneous purchases with a card. The prescribed penalties must include dismissal of the employee, as appropriate. In addition, subsection (c) requires the head of each agency with more than $10 million in annual purchase card expenditures to issue a semiannual report on purchase card violations by its employees. The report must be issued jointly with the agency IG and submitted to the OMB Director.

41 U.S.C. Â§1909(d), Risk Assessment and Audits, requires the IG of each agency to

1. Conduct periodic assessments of agency purchase card programs to identify and analyze the risks of misuse and to use these assessments to develop an audit plan. 2. Audit purchase card transactions in order to identify potential misuse, patterns of misuse, and categories of purchases that could be made with another payment method in order to obtain lower prices. 3. Report the audit results to the agency head, along with recommendations for addressing any findings. 4. Report to the OMB Director on the implementation of the IG's recommendations. The OMB Director must compile the IG reports and transmit them to Congress and the Comptroller General.

41 U.S.C. Â§1909(e), Relationship to Department of Defense Purchase Card Regulations, clarifies that subsections (a) through (d) do not apply to DOD.

Section 2(a)(2) of the Charge Card Act amended 10 U.S.C. Â§2784(b) to codify new purchase card management requirements for DOD. Only the Charge Card Act requirements are listed below.

10 U.S.C. Â§2784(b)(2) requires DOD to ensure that each cardholder is assigned an approving official other than the cardholder. 10 U.S.C. Â§2784(b)(11) requires DOD to use effective systems, techniques, and technologies to prevent or identify potential fraudulent transaction. 10 U.S.C. Â§2784(b)(12) requires DOD to invalidate the purchase card of each employee who (a) ceases to be employed by DOD, immediately upon termination, (b) transfers to another unit of DOD, immediately upon transfer, unless both units are covered by the same purchase card authority, or (c) is separated or released from active duty or full-time National Guard duty. 10 U.S.C. Â§2784(b)(13) requires DOD to take steps to recover the cost of any illegal, improper, or erroneous purchases made with a purchase card, including through salary offsets. 10 U.S.C. Â§2784(b)(15) requires DOD to conduct periodic assessments of agency purchase card programs in order identify and analyze the risks of misuse and to report the results to the OMB Director and Congress.

In an effort to assess compliance with the Charge Card Act and other purchase card requirements across the government, GAO reviewed agency policies and data from FY2014 and released its analysis in 2017. More recently, the Council of the Inspectors General on Integrity and Efficiency (CIGIE) launched a coordinated audit of FY2017 purchase card data. The IGs at 20 agencies sampled a total of 1,255 "high-risk" transactionsâpurchases that potentially violated program policies or proceduresâfrom and shared their findings with CIGIE. By July 2018, the IGs had released their own reports and CIGIE had issued a summary and analysis of the findings. According to the CIGIE analysis, while there were few examples of fraud at the 20 agencies that participated in the project, nearly 51% (501) of the purchases sampled failed to comply with at least one purchase card policy. Patterns of noncompliance, with examples and analysis from the GAO report, individual agency audits, and the CIGIE report are discussed below.

Purchases from Prohibited or Questionable Merchants

Federal statutes and regulations, including agency-specific regulations, may prohibit the purchase of supplies and services from certain merchants or for certain items. USDA's purchase card guidance, for example, prohibits employees from using their purchase cards to obtain cash advances, bail bonds, personal items, or escort services. Agencies are often able to block merchants of certain categoriesâsuch as cruise lines or casinosâthrough the card-issuing bank. Some merchants, while not prohibited, are considered "questionable" because the items or services they offer may be allowed by agency policies, only if certain conditions are met. A purchase card may be used at a catering company, for example, but only under certain circumstances. Exceptions may be permitted for transactions with prohibited or questionable merchants under limited circumstances, but they must be justified by the cardholder and approved by the AO.

The CIGIE analysis found that nearly 8% of high-risk purchases violated agency policies regarding prohibited or questionable merchants. Of those, nearly one-half lacked a written justification and/or authorization from the AO. An IG at one agency found an employee had used his purchase card to lease multiple vehicles at a cost of more than $5,700, and had provided no documentation to support the need and appropriateness of the transaction. In addition, agencies often failed to block merchant categories; one agency permitted transactions at seven types of prohibited businesses. Even when agencies attempted to block certain merchant categories, the technology did not work consistently. The EPA IG found 20 purchase card transactions at merchants who had been blocked by the agencyâthe cards had not been declined at the point of sale.

Purchase card holders are required to use mandatory sources to obtain needed supplies, when possible. Cardholders may use other sources only after confirming that the supplies or services they need are not available from a mandatory source. Auditors found, however, that in nearly one out of every five transactions (19.9%), cardholders purchased supplies and services from nonmandatory sources when they could have acquired them from mandatory sources. As a consequence, agencies not only failed to support certain categories of merchants that are mandatory sources, such as people who are blind or severely disabled, but they also may not obtain the best available price and thereby reduce potential cost savings. One cardholder, for example, purchased batteries from a nonmandatory source for $64.49 when they were available from a mandatory source for $11.42âmeaning the agency overpaid by 565%. Similarly, a cardholder at USDA purchased a used Global Positioning System (GPS) device from a nonmandatory source when a new model was available from a mandatory source for 15% less.

Purchases from nonmandatory sources may be authorized if a written justification is provided, but cardholders frequently failed to provide one. Auditors at the Department of the Interior (DOI), for example, determined that cardholders had failed to justify purchases from nonmandatory sources 65% of the time. Overall, the CIGIE reported that cardholders provided no justification for a majority of transactions with nonmandatory sources. Other documentation policies were violated as well. The CIGIE data showed that 36% of nonmandatory purchases lacked a requisition request, 32% lacked evidence of receipt, and 6% had no documentation at all.

Generally, federal purchase card transactions are exempt from state and local sales taxes. Cardholders are responsible for ensuring that their transactions do not include sales taxes, and attempting to recover sales taxes if they are paid erroneously. IGs at 20 federal agencies found many instances of purchase card holders paying sales taxesâmore than 5% of the high-risk transactions in the CIGIE study included charges for sales taxes. Of the transactions that included sales tax, 58% lacked a written justification for paying the taxes and 20% of the items may not have been needed by the government. In many cases, agencies did not track whether the sales taxes were recovered. The USDA IG investigated seven transactions that included sales taxes, and none of the cardholders provided any documentation as to whether they attempted to recover the tax charges. An audit of NASA's purchase card transactions found that 7% of all high-risk purchases included sales tax, and that there was no evidence that the cardholders had attempted to reclaim those costs. While sales tax on any single transaction may not be considered significant, the cumulative amount in a fiscal year may total in the hundreds of thousands of dollars. The DOI IG obtained actual tax-paid data from the agency's purchase card program and determined that in the first six months of FY2017, DOI paid $338,212 in sales taxes involving 19,716 transactions. The IG for HUD found the agency expended $42,944 in sales tax on purchase card transactions during FY2018.

Each purchase card holder is assigned a dollar amount, or threshold, which may not be exceeded on a single transaction. This threshold is known as the single purchase limit. Cardholders may not split a large purchase into smaller ones in order to circumvent the single purchase limit. Auditors typically flag an account that shows multiple purchases from the same vendor on the same day where the total costs exceed the cardholder's single purchase limitâthis pattern is often associated with split transactions.

The CIGIE report estimated that 6.6% of all high-risk transactions involved split transactions. The USDA IG, for example, identified a series of transactions on the same day, with the same vendor, for the same product, where the sum of the charges was more than double the cardholder's single purchase limit. Similarly, the NASA IG determined that an employee had tried to circumvent the single transaction limit by making three purchases from the same vendor on the same day. Auditors at the Social Security Administration (SSA) identified split transactions in 6.5% of its sample. The agency suggested that its staff lacked the time to investigate these purchases and determine if they were inappropriate.

Implications for Agency Internal Controls

Although the CIGIE initiative did not assess the implementation status of every requirement in the Charge Card Act, the IGs' findings indicated weaknesses remain in many agencies' internal controls. In particular, the audit results showed that AOs did not adequately monitor cardholder purchases; employee training on purchase card policies and procedures is insufficient; and agency policies and procedures have gaps.

The Charge Card Act required agencies to strengthen AOs' capacity to monitor cardholder activity. AOs play a central role in preventing and detecting purchase card misuse, as they review cardholder statements to verify any suspicious or questionable transactions. In addition, AOs reconcile transaction records with supporting documentation to ensure that all purchases were appropriate.

Audit findings highlighted the ongoing need for AOs to carefully review cardholder transactions. Many transactions that violated agency purchase card policies had not been reviewed and approved by an AO. GAO found that 11% of all the transactions it sampled from FY2014 had not been reviewed and approved by an AO. Similarly, the CIGIE report found that 44% of the transactions involving questionable or prohibited sources and 38% of split transactions had not been reviewed by the AO. These charges may have been questioned had the AOs thoroughly reviewed the purchases.

In many cases, AOs approved transactions that lacked complete supporting documentation. GAO estimated that 22% of all purchase card transactions in FY2014 lacked complete documentation.

IGs reported that 59% of the purchases that violated agency policies on the use of mandatory sources lacked written justification, as did 58% of the purchases that violated policies prohibiting the payment of sales taxes. In many cases, AOs approved transactions where there was no documentation that the goods or services had been received. The CIGIE report estimated that of the total number of transactions that violated an agency purchase card policy, 27% were approved without a receipt.

The Charge Card Act specifies that agencies are to ensure that cardholders and AOs receive appropriate training on their duties. IGs found that at many agencies, purchase card training programs did not cover some policies or refresher training had not occurred within the past three yearsâconditions which are inconsistent with OMB training requirements. Auditors considered the lack of proper training to be a significant weakness with wide-ranging effects. As the EPA IG's office wrote, "cardholder noncompliance primarily resulted from ineffective training and/or a lack of monitoring and control activities."

The CIGIE report found, for example, that agency training programs often lacked adequate explanations of the rules governing split transactions, which meant that AOs did not know how to properly identify such purchases and cardholders were unaware that split purchases were violations of policy. The NASA IG recommended that the agency revise its purchase card training program to emphasize minimum documentation requirements, which constituted NASA's largest category of policy violations. Multiple agencies were unable to provide complete training records. The HUD IG found, for example, that the agency had not maintained records of the cardholders and managers who had completed the required training, as did the IG at the Small Business Administration (SBA).

Agencies develop their own policies to implement government-wide and agency-specific purchase card requirements. The CIGIE report found that agency guidance was often unclear. Consequently, cardholders and managers did not always understand and properly follow purchase card policies. The IG at the Department of State recommended that the agency reissue its purchase card guidance to specify the frequency with which "refresher training" must be completedâa policy which was inconsistently represented at different components. The NASA IG linked one particular weaknessâthe absence of supporting documents for purchase card transactionsâto agency guidance, which was unclear about the document requirements for purchases below $500. The EPA IG recommended that the agency revise its guidance on the use of mandatory sources to make it easier to understand. More than 39% of EPA's noncompliant transactions were related to the inappropriate use of nonmandatory sources.

In some cases, agency policies did not provide sufficient information about purchase card requirements. GAO found that several agencies did not require someone other than the cardholder to receive purchases. In addition, the CIGIE report found that while split transactions were a common violation, many agencies "lacked the policies necessary to identify split purchases." The USDA IG identified 1,410 transactions in FY2018 where the agency paid sales taxes and could not determine if any efforts had been made to recover those charges. The IG wrote that

This occurred because USDA does not have a policy requiring cardholders to document reasons for paying or attempting to recover sales tax, such as documenting on the receipt or using the AXOL system to describe the transaction. As a result, cardholders are improperly paying sales tax and not documenting why sales taxes were paid or if recovered, making it difficult for approving officials to determine why State and local sales taxes were paid or if any recovery was attempted.

Auditors at EPA determined that the agency did not have adequate controls over its purchase card program, in part because the agency lacked a specific policy for the appropriate number of cardholders needed to make purchases at its various components.

Oversight of agency purchase card programs is limited by the availability of data. While the CIGIE report identified areas where implementation of the Charge Card Act is incomplete, not all agencies had provided data and the data provided did not reflect or represent all of the law's requirements. Moreover, implementation of the Charge Card Act is ongoing and some agencies may have already addressed the weaknesses identified in the CIGIE initiative, which analyzed FY2017 data.

Going forward, Congress has the option of requesting a study of the implementation of the Charge Chard Act. If GAO were to examine implementation of the Charge Card Act, it would possibly be able to use more recent data and it could target agencies with the highest risk of card misuse, as determined by dollar volume or history of violations, among other criteria. GAO might be asked to evaluate specific requirements, particularly in areas that were cited by auditors prior to the Charge Card Act. Have agencies implemented policies that require separation of duties? Have agencies established appropriate dollar thresholds for various categories of cardholders? Are agencies invalidating purchase cards when an employee terminates employment or is transferred to another component? The CIGIE report noted another potential weaknessâapproximately 8.6% of the high-risk transactions sampled involved purchase card activity on closed accounts. The extent of agency compliance with these and other purchase card requirements will not be known without additional, timely information.

In addition to agency efforts, an evaluation of the effectiveness of SmartPay bank services and tools might be useful. As noted, agencies have reported that merchant block codes do not always prevent transactions from being approved at prohibited merchants. In addition, GAO found that SmartPay banks did not always retain records for the amount of time required by their contracts, in part due to confusion over which records were considered part of the transaction. An evaluation of bank services might identify additional issues that need to be addressed. It also might include a comparison of the technologies different agencies utilize and discuss what benefits they have realized. Given the potential for technology to enhance oversight, reduce administrative burden, and mitigate the risk of improper purchases, an assessment of SmartPay bank services may help agencies identify potentially useful technologies they have not yet incorporated into their charge card programs.


Consideration of Privileged Nominations in the Senate

Summary: Privileged nominations are a subset of presidentially appointed and Senate-confirmed positions that are eligible for consideration under procedures established by S.Res. 116 (112 th Congress, 2011-2012). The vast majority of the 285 nominations designated as privileged are part-time positions to various boards and commissions, though some full-time positions are privileged as well (e.g., chief financial officers and certain assistant secretaries in Cabinet-level agencies). The procedures for privileged nominations may reduce the workload of committees of jurisdiction in processing these appointments for consideration by the Senate.

Summary: The creation of privileged nominations and the special procedures for their consideration were part of a larger effort at reforming the confirmation process in the Senate during the 112 th Congress. At the outset of the 112 th Congress, a bipartisan working group was formed and ultimately produced both S.Res. 116 , "A resolution to provide for expedited Senate consideration of certain nominations subject to advice and consent," and S. 679 , the "Presidential Appointment Efficiency and Streamlining Act of 2011" ( P.L. 112-166 ). The list of privileged nominations, first established in 2012, was expanded in 2015 by P.L. 114-1 , the Terrorism Risk Insurance Program Reauthorization Act of 2015, to include 13 members of the Board of Directors for the National Association of Registered Agents and Brokers.

Summary: Unlike a typical nomination, a privileged nomination is not referred to committee unless requested by any Senator. Instead, it is entered into the "Privileged Nominations" section of the Senate Executive Calendar . Committees are required to request biographical and financial information from these nominees, typically in the form of committee questionnaires. Upon receipt of the requested information, the committee chair notifies the Executive Clerk in writing. The nomination then remains in the "Privileged Nominations" section of the Executive Calendar for 10 days of session before moving to the "Nominations" section, where it is eligible to be brought up for consideration on the floor of the Senate. This process allows a nomination to become eligible for floor consideration even though the committee did not hold a formal markup meeting to vote to report it. There are no expedited floor procedures for privileged nominations, and they are brought up and considered under the same procedures as any nomination reported by a committee.

Summary: Any Senator may request on his or her own behalf, or on behalf of any identified Senator, that a privileged nomination be referred to committee. Such a request automatically triggers the referral of a privileged nomination. If a nomination is referred in this way, it must be reported by the committee (or the Senate must discharge the committee of the nomination) before the full Senate can consider it. The vast majority of privileged nominations considered on the Senate floor were not subject to a request for referral to committee. As of the end of 2019, the Senate has considered 467 privileged nominations, and there have been 22 instances of privileged nominations being referred to a committee at the request of a Senator. Such requests for referral are usually initiated by a Member on the committee with jurisdiction over the nomination and oftentimes originate with the committee's chair or ranking member.

Every year the Senate routinely considers whether to give its advice and consent to hundreds of nominations submitted by the President. From start to finish, the confirmation process can be a lengthy one, even for relatively noncontroversial nominees. Each nomination is typically referred to one or more committees having subject matter jurisdiction over the position. Committees may bear a significant workload in examining nomineesâoften including questionnaires, optional public hearings, and individual meetings with Senatorsâto determine whether to report a nomination to the full Senate. Once a committee has reported a nomination or been discharged from its further consideration, the Senate may take up a nomination for deliberation, though a cloture process may be required to ensure a final vote to confirm.

As part of an effort to streamline the nominations process during the 112 th Congress (2011-2012), a standing order of the Senate, S.Res. 116 , created a new designation of certain nominations as "privileged." These so-called privileged nominations are subject to special procedures that may save the time of committees in processing these appointments. In total, there are 285 positions to which nominations are privileged, the majority of which are part-time appointments to oversight boards and advisory commissions, but they also include full-time chief financial officers and certain assistant secretaries to cabinet-level agencies. A full list of privileged nominations, organized by their committees of jurisdiction, can be found in Appendix .

This report first examines, in detail, the special procedures under which privileged nominations are processed, as well as the action by which a Senator may have a privileged nomination referred to its committee of jurisdiction. It then provides a brief legislative history of S.Res. 116 and subsequent legislation that has created additional privileged nominations. Finally, this report includes data on and a discussion of Senators' requests to refer privileged nominations to committee. Figure A-1 contains an example of the "Privileged Nominations" section of the Senate's Executive Calendar .

The sections below discuss each step of how a privileged nomination might be processed under potentially expedited procedures before consideration by the full Senate. Pursuant to Section 1(d) of S.Res. 116 , any Senator may insist that a privileged nomination be referred to its committee of jurisdiction, making it no longer eligible for procedures under S.Res. 116 . Further discussion of when and why a Senator might make such a request follows after the sections on consideration.

Unlike a typical nominationâwhich, when received by the Senate, is usually referred to its committee of jurisdictionâa privileged nomination goes directly to the "Privileged Nominations" section of the Executive Calendar . There, the nominee and position to which he or she was nominated is to be recorded, along with the date the nomination was received by the Senate. An example page of the "Privileged Nominations" section of the Executive Calendar appears in Figure A-1 .

The same day a privileged nomination is received in the Senate, the Office of the Executive Clerk sends a notification form to its committee of jurisdiction. This transmittal from the Executive Clerk is not a referral of the nomination to the committee but rather serves to inform the committee it should proceed to request information from the nominee. A column in the Privileged Nominations section of the Executive Calendar entitled "Information Requested by Committee" is marked with a "Yes" to denote this transaction.

Information Requested and Received by Committee

Though under the terms of S.Res. 116 , privileged nominations are not referred to their committees of jurisdiction, these committees are still responsible for obtaining certain background information from nominees before they can be considered by the full Senate. Section 1(b) of S.Res. 116 directs that the "appropriate biographical and financial questionnaires" be collected by committees of jurisdiction from privileged nominees. This broad requirement gives committees some discretion in determining what information to collect. As a result, committee practices on obtaining information from privileged nominees can vary.

Once a nominee has responded to a committee's questionnaires, the chair is required to notify the Executive Clerk in writing that the appropriate information has been received. This requirement is fulfilled, in practice, when the committee returns the notification form to the Executive Clerk's office.

When a committee has affirmed receipt of the requested information from a nominee, that date is recorded under the "Requested Information Received" column in the Privileged Nominations section of the Executive Calendar . Senators have 10 session days from this date (and any time prior to this point, starting from the day the nomination was received in the Senate) to request that the nomination be referred to its committee of jurisdiction. After 10 session days have passed, the nomination is then moved to the "Nominations" section of the Executive Calendar and is eligible to be called up for consideration on the Senate floor (after lying over for one day or, by unanimous consent, immediately).

Privileged nominations that have been considered under these procedures are to appear in the Nominations section of the Executive Calendar with the designation "Placed on the Calendar pursuant to S.Res. 116 , 112 th Congress" under the "Reported By" column, along with the date it first appeared there.

Final Consideration Under Regular Procedures

Once a privileged nomination has moved to the Nominations section of the Executive Calendar , there is no expedited process under which the Senate can proceed to consider or vote on it. Instead, these nominations are equally eligible for consideration as any other found on the Nominations section of the Executive Calendar . As a result, even privileged nominations that may have moved quickly through the expedited committee process could face lengthy wait periods before being brought up for consideration by the full Senate. Some privileged nominations never receive a vote on the Senate floor and are returned to the President when the Senate adjourns sine die at the end of the first or second session of a Congress or when it recesses for more than 30 days.

Referral of a Privileged Nomination to Committee

As noted earlier, pursuant to Section 1(d) of S.Res. 116 , any Senator may trigger, on his or her own behalf or the behalf of any identified Senator, that a privileged nomination be referred to its committee of jurisdiction for consideration under normal procedures. Any such request compels the referral of the nomination to committee. Senators do not need to obtain recognition on the floor to make such a request, nor are they required to provide a reason for their request. Instead, a form for this purpose is available at the dais on the Senate floor. A Senator's request is then to be reflected in that day's Congressional Record , and the nomination is to be referred to its committee of jurisdiction. Additional data on requests for the referral of a privileged nomination can be found in Table 1 .

Senators may make such requests for a variety of reasons. Senators may have concerns over the qualifications or fitness of an individual to serve in the position to which he or she was nominated. Referring the nomination to committee ensures that it will need the support of a majority of the committee to be reported to the Senateâa higher threshold than under the procedures of S.Res. 116 , which require only that the committee's chair affirm that the requested biographical and financial information has been received. Alternatively, a Senator may desire more time for individual meetings with Senators or a public hearing where a nominee's credentials can be extolled, perhaps increasing the chances of a favorable floor vote.

Legislative History on the Creation of Privileged Nominations

The creation of privileged nominations and the special procedures applied to them were part of a larger effort to reform the confirmation process in the Senate during the 112 th Congress (2011-2012). On January 5, 2011, Majority Leader Harry Reid and Minority Leader Mitch McConnell engaged in a brief colloquy to discuss the pace of processing nominations in the Senate, noting the increasing volume of Senate-confirmed positions and the need for reform. Connecting the oftentimes laborious confirmation process with difficulty in finding capable nominees, Majority Leader Reid said:

Clearly, all Presidents are entitled to choose well-qualified individuals to serve in their administration. In the vast majority of instances, the individuals nominated by the President are not controversial, but many have faced delays before assuming their positions. These delays mean critical decision-makers are not in place. And, the delays make it harder to find qualified peopleâmany great nominees simply cannot wait around for months as the stress and uncertainty affects their families and careers. We need to do better in the 112 th Congress.

The two leaders agreed to form a bipartisan nominations reform working group, consisting of Senators Chuck Schumer and Lamar Alexander, the chair and ranking minority member of the Committee on Rules and Administration; Senators Joe Lieberman and Susan Collins, the chair and ranking minority member of the Committee on Homeland Security and Governmental Affairs; and the floor leaders themselves. By the end of March, members of the group had introduced two measures: S. 679 , the Presidential Appointment Efficiency and Streamlining Act of 2011, and, S.Res. 116 , a resolution to provide for expedited Senate consideration of certain nominations subject to advice and consent.

S.Res. 116 was submitted on March 30, 2011, by Senator Schumer on behalf of himself and 14 other Senatorsâincluding all members of the nominations reform working groupâand was referred to the Committee on Rules and Administration. The Rules Committee met on May 11 and ordered the resolution reported favorably by voice vote without amendment.

The Senate took up S.Res. 116 for consideration on June 29. Three amendments to the resolution were proposed and considered, with a package of negotiated and technical changesâreferred to as a "managers' amendment"âultimately being agreed to.

The first amendment, proposed by Senator Tom Coburn, contained language requiring reporting requirements on legislation creating new federal programs. The amendment was not agreed to, 63-34, after failing to achieve a two-thirds threshold for adoption, pursuant to an earlier unanimous consent agreement. A second amendment, proposed by Senator Tom Harkin on behalf of Senator Tom Udall, would have amended Senate Rule XXII to establish a majority-vote threshold for invoking cloture on executive branch nominees. This amendment was ruled out of order by the chair. The final amendment, offered by Senator Schumer, included provisions that expanded the positions to be considered as privileged nominations (including several full-time chief financial officers and certain assistant secretaries) and required that future legislation proposing new presidentially appointed positions be accompanied by a justification report. The amendment was adopted by unanimous consent.

The Senate agreed to S.Res. 116 , as amended, by a vote of 89-8, on June 29, 2011.

H.R. 26 , the Terrorism Risk Insurance Program Reauthorization Act of 2015, during the 114 th Congress (2015-2016), created a new 13-member Board of Directors for the National Association of Registered Agents and Brokers and designated these positions as privileged nominations established by S.Res. 116 (112 th Congress). To date, this legislation marks the first and only expansion of the privileged nominations category.

The language establishing these new privileged nominations first appeared in the 113 th Congress (2013-2014) with the introduction of S. 534 , the National Association of Registered Agents and Brokers Reform Act of 2013. The legislative history of S. 534 offers no additional comment on the designating of these 13 positions as privileged nominations. Nonetheless, these positions fit the general profile of the type of nominations for which expedited consideration was designed (e.g., part-time boards and commissions).

Privileged Nominations Referred to Committee

The Senate has considered 467 privileged nominations since S.Res. 116 was agreed to on June 29, 2011. Of those 467, 22 (4.7%) have been referred to committee at the request of a Senator. This rate of referral suggests that Senators are generally deferential to the expedited committee consideration of privileged nominations. Table 1 provides data on these 22 instances of requested referrals. Each entry contains identifying information about the nomination, including the Congress when the nomination was submitted, the name of the nominee, the position to which he or she was nominated, and the final disposition of the nomination by the Senate. Table entries also note the committee of jurisdiction for each nomination and a column indicating whether the Senator requesting referral was a member and/or leader of that committee at the time he or she made the request.

As previously discussed, under the provisions of S.Res. 116 , any Senator has the right to request that a privileged nomination be referred to its committee of jurisdiction. The vast majority of these requests have been by a Senator on the nomination's committee of jurisdiction. Of the 22 instances where a privileged nomination has been referred, 20 have been made by a Senator from the committee of jurisdiction. Furthermore, 14 of those 20 requests were made by either the chair or ranking member of the committee of jurisdiction.