OMB Circular A-123 and the Government Travel Card

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» Posted by on Dec 15, 2014 in Government Traveler Comments, Payment Methods | 0 comments

The United States Office of Management and Budget (OMB) issued Circular A-123 that is used to define management responsibilities for internal financial controls in all Federal agencies.  Two of the items addressed in Appendix B of the circular directly relate to government travel credit cards.  The circular requires that agencies pay for Individually Billed Account (IBA) charges using a split travel disbursement and also requires that agencies perform a credit worthiness evaluation for all new travelers that receive a government credit card.

Performance of a credit worthiness evaluation only applies to new card applicants and must be performed prior to issuing the card.  To meet this requirement our credit card provider obtains the credit score on all new applicants as part of the application process.  The new applicant must have a FICO credit score of 660 or greater to receive an “unrestricted” status; a score of less than 660 will result in the issuance of a “restricted” card.

Split disbursement offers travelers a higher level of convenience by sending their credit card payment directly to the credit card company. This eliminates the need to write a personal check, the cost of a stamp, and the worry of not getting the payment in by the due date.  Split disbursement works by splitting the voucher amount claimed into two payments.  The payment going to the credit card includes charged items such as airfare, hotel and rental car and the payment that goes to the traveler is for M&IE and out of pocket expenses such as parking and taxi.  Split disbursement is an effective tool to reduce delinquency and improve refunds paid to the agency.

Both of these requirements reduce the risk to the credit card company by ensuring that applicants have a proven record for paying their bills timely and ensuring that payments are made to the card companies at the same time the traveler is reimbursed for their trip.

by Diana Bonnell

Disclaimer: The contents of this message are mine personally and do not reflect any position of the Government or my agency.  Use of this equipment is consistent with the agency’s policy governing limited personal use.

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