Understanding Accounting
Billing is often the final step of the transactional process wherein vendors have the opportunity to frustrate, or even infuriate, the client. In the case of hotels, a traveler who made a reservation, checked in, stayed at a hotel without issue, and enjoyed a smooth checkout process is not entirely free of potential problems until the bill has been paid. To assist with the reconciliation process for Individually Billed Accounts (IBA), Centrally Billed Accounts (CBA), and Direct Billed Accounts, some elementary materials communicating a base-level expectation of the kind of billing and terms vendors should expect could prove useful. Particularly in heavily franchised industries, the dissemination of rudimentary information explaining proper invoicing could prove...
Split Disbursement
Effective October 1, 2005, OMB Circular A-123 mandated the use of split disbursement for government travelers. Split disbursement is the process of dividing a travel voucher reimbursement between the charge card vendor and the traveler. The balance owed to each is sent directly to the appropriate party. On April 21, 2005, the Department of the Treasury formally waived requirements of 31 CFR 208.6 and 210.5. This waiver allowed Federal agencies to issue part or all of an employee’s travel reimbursement to the travel card-issuing bank for crediting to the employee’s travel card account. For more information on the split disbursement waiver, you may visit this website: http://www.fms.treas.gov/news/split_travel_disbursement_waiver.pdf Split disbursement offers a...
OMB Circular A-123 and the Government Travel Card
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...
Government Travel Charge Card Payment Problems
The payment of Government travel charge cards (IBAs) and the liability placed on individual travelers is an interesting topic. At the agencies I have been a part of as a travel administrator, travelers who are expected to travel at least twice a year are either strongly encouraged or required to get a travel charge card. When travelers apply for the travel charge card they do it with the understanding that they are liable to pay their statement each month. Even if they have yet to receive reimbursement from the Government for their travel, travelers are required to make full payment or their travel charge card. I’ve seen this become a tense situation when several travelers were left without travel reimbursement for almost two months, despite their...
The Travel Card: Official Business or Personal Use
The DOD Travel Card Program provides federal government travelers a safe method to pay expenses associated with official travel. In 2008, GSA awarded Citibank the contract for the Smart Pay 2. The Travel Card Program contains both the Individually Billed IBA and Centrally Billed Accounts (CBA). IBA’s are individual accounts managed by each traveler. CBA’s are managed by one person in an organization for several travelers. The program was mandated under the Travel and Transportation Reform of 1988. This act basically states, “The travel card must be used in conjunction with official travel only”. In order to receive standard travel card with a credit limit of $7,500 a traveler must have a credit score of 660. Every traveler with a score below 660...
Payment of Travel Expenses
The primary way for paying for Government travel is through the GSA SmartPay 2 program. GSA’s SmartPay 2 program provides Government agencies with commercial charge card procurement and payment solutions through master contracts established the program in 1998. GSA issued contracts to four credit card companies to issue cards on behalf of the Government. To date over 42 million cards have been issued and is the largest program of its kind in the world. SmartPay program cards can be issued to either individuals or agencies. Individual Billed Accounts or IBA’s are issued to individuals for use during official travel. These credit cards are issued in the travelers name with the traveler having full responsibility for payment and reconciliation. A...
Because We Need Them
Our government agency processes payments for several customers. Therefore, it is common for us to receive a telephone call regarding a travel reimbursement. We can issue reimbursements in four ways: electronic funds transfer (EFT), individually billed accounts (IBA), centrally billed accounts (CBA) and checks. The flexibility is necessary to accommodate different travel situations. The following three scenarios show three travelers going on the same trip. All of the travelers need a flight on Tuesday from Washington, DC to Atlanta, GA for a three day conference. Each traveler will take a taxi to and from the airport and stay in the same Atlanta hotel, but their method of reimbursement will be different. Traveler 1 will start to work at his government...
Travel Transaction Fees
Domestic or international, request assistance or book on-line are all factors of how much a traveler will be charged for their government travel reservations. Government travelers are still struggling with the different fees that appear on their travel documents. First there are the Travel Management (TMC) fees. The TMC fee is charged at the time the ticket is issued for airfare and when the hotel reservation is booked. The rate of the fee is based upon the service that is provided to the traveler. The TMC fee is significantly lower if the traveler books reservations on-line rather than calling an agent for traditional service. Also the fee for international reservations is higher when the traveler requests assistance due to the complexity of the travel. The...
Flexibility in Payment Methods — Because We Need Them
Our government agency processes payments for several customers. Therefore, it is common for us to receive a telephone call regarding a travel reimbursement. We can issue reimbursements in four ways: electronic funds transfer (EFT), individually billed accounts (IBA), centrally billed accounts (CBA) and checks. We also receive funds from travelers when they have been overpaid. The flexibility is necessary to accommodate different travel situations. The following scenarios show travelers going on the same trip. All of the travelers need a flight on Tuesday from Washington, DC to Atlanta, GA for a three day conference. Each traveler will take a taxi to and from the airport, stay in the same Atlanta hotel and eat the same meals, but their method of...
Rental Car
The Defense Travel Management Office (DTMO) has managed the rental car program for the Federal government since October 2007. The Government Car Rental Program is designed to be used for official government business to meet mission requirements. There are many benefits of the Government Rental Car Program. One of the most significant benefits to government personnel on official business is the collision damage waiver (CDW) insurance. This insurance is included at no extra charge. Besides attractive rates, other benefits include unlimited mileage, age restriction reduced from 25 to 18, and much more. Rental cars can be reserved using the E-Gov Travel System (ETS) or by contacting the Travel Management Center (TMC). The preferred method of payment is the...
Payment Systems
My agency uses both the Centrally Billed Accounts (CBA) and Individually Billed Accounts (IBA) for travel expenses. Agency travelers are required to use their GSA SmartPay2 program cards (government travel charge cards) issued by US Bank to pay for lodging and rental car expenses. Previously, travelers also used their IBA to pay for airfare expenses, but all transportation expenses are currently being paid by a CBA, along with the e-travel transaction fees. After a traveler submits an expense report, our agency financial system issues split disbursements through Electronic Funds Transfer (EFT). Charges made to the IBA are paid directly to the bank and out of pocket expenses owed to the employee (miscellaneous expenses, taxi, parking, etc) are made directly...
Travel Financial Transactions
How do I travel without a cash advance and without writing a check to pay off my IBA? OK, the question is slightly misleading but it got your attention I hope. My method doesn’t work 100% of the time, but way more often than not. Here is what I DON’T want to do. One, I DON’T want to request and then make sure I receive a cash advance prior to leaving on a trip. (And I certainly don’t want to have to concern myself with returning a cash advance if my trip gets canceled.) Two, I DON’T want to have to write a check or otherwise make a payment for my personal travel card after the trip is over. Let assume a “normal” trip – airfare, rental car, & hotel. I make my airfare, rental car, & hotel reservations online in our E-Gov Travel...
Expense Account Reconciliation – we are all sharing the same pain
From what I remember, the private sector about 10 years ago was working on a way to have the credit card charges on corporate issued Individual Billed Accounts (IBA) linked to an internal website where the traveler would do their expense account and submit it for payment. The government saw this as a way to start driving more compliance with their charge cards and adapted the same basic system. It used to be that if you charged an expense on your card, you did not have to submit receipts for those expenses. Life seemed really good then as all those paper receipts were not always required. You of course had to add “Manual Expense Items” basically those items that you would pay in cash for things like a cab ride. It really did not take that much time to...
Payment Systems
My agency uses both the Centrally Billed Accounts (CBA) and Individually Billed Accounts (IBA) for travel expenses. Agency travelers are required to use their GSA SmartPay2 program cards (government travel charge cards) issued by US Bank to pay for lodging and rental car expenses. Previously, travelers also used their IBA to pay for airfare expenses, but all transportation expenses are currently being paid by a CBA, along with the e-travel transaction fees. After a traveler submits an expense report, our agency financial system issues split disbursements through Electronic Funds Transfer (EFT). Charges made to the IBA are paid directly to the bank and out of pocket expenses owed to the employee (miscellaneous expenses, taxi, parking, etc) are made directly...
TMCs and the SmartPay Programs
Since the inception of the federal regulation, public law 105-246 on January 27, 1998 which mandated the use of a government furnished travel charge card, TMC’s and TSS agencies had many benefits from this program. Most importantly, TMC’s could process payment for travel services and their fees immediately, processing ticketing and reservations for government employees. A TMC receives this payment through either the CBA, centrally billed account, or IBA, individually billed account, and sends payment to ARC. This eliminates the risk of the TMC/TSS not being paid. Government travelers are required to reconcile their bills, confirming the services provided, and submit a voucher for payment internally, as they are individually responsible for payment to...
A Traveler’s Choice
The Federal Travel Regulations state that travelers have the right to choose their lodging as long as it is within agency policy. When the traveler is booking hotel accommodations using the E-Gov electronic travel system (ETS) and has an individually billed government travel card (IBA), the traveler has the option to select the hotel they want to stay in giving first consideration to FedRooms. However if the lodging is being charged to the Centrally Billed Account (CBA), the traveler may have to stay at an alternate hotel. When lodging is being charged to a non-point of sale CBA, someone within the agency that is authorized to use the CBA would need to place a telephone call to the hotel and reserve a room. When calling to make a reservation, the only...
Payment Methods
The United States Government used to buy transportation services with what we call GTR (Government Transportation Request). This method of payment is being phased out and will be replaced with charge cards. In 1998 a law was introduced to mandate the use of charge cards to pay for travel expenses; thus the GSA SmartPay was introduced. GSA SmartPay: This program provides transportation purchase for over 350 Government agencies and organizations. This method expired in 2008 and was replaced by SmartPay 2. GSA SmartPay2: With new technology and expanded services, these uniquely numbered for recognition as Government issued charge cards, were issued by 4 contractors: GE Capital Finance, JP Morgan chase, Citibank, US Bank. Cards issued to agencies or...
Travelers Responsibility for Partially or Unused Tickets
Millions of dollars are lost to the government and taxpayers each year because travelers do not initiate the refund process. Holding onto a totally or partially used airline ticket costs your agency money. Unused tickets have a monetary value; therefore any adjustments in your ticketed transportation that pertains to an unused segment must be promptly processed to prevent a loss. The definition of an unused ticket is Tickets purchased for Government travel, but never used. Travel is terminated short of the authorized destination. Return portion of a round-trip ticket is not used. Services actually furnished are different or of a lesser value than those authorized. The traveler dealing with an unused ticket that was purchased with their individually billed...
SmartPay®2 Transition and the E-Gov Travel Service
Over Thanksgiving weekend, 2008, the vast majority of federal civilian agencies executed a “flash cutover” from their existing SmartPay® travel cards to newly-issued SmartPay®2 travel cards. In order to support this cutover for their 65 agency customers, the E-Gov Travel Service (ETS) contractors had to replace all of the SmartPay® charge card numbers (both Centrally Billed Accounts and Individually Billed Accounts) in approximately 500,000 ETS user profiles with new SmartPay® 2 numbers … all without a significant disruption of service or impact to travelers. The project to accomplish the SmartPay®2 transition for ETS was managed by the U.S. General Services Administration (GSA). It began years earlier but took on its greatest momentum during the...
Individually Billed Accounts – Charge Cards
Credit cards and debit cards have all but become the default method of payment for consumers over the last few decades. The same is true with government travel. Instead of issuing cash advances (although this is sometimes still necessary), paying with cash, and having a paper trail to follow, government travelers now have the convenience of paying for travel expenses either with an individually-issued government travel charge card (IBA) or through an agency’s centrally billed account (CBA). Most government travelers are now issued their own personal government travel charge card, commonly abbreviated as GOVCC or IBA. Most cards for our customers are issued through Citibank. The individually-issued card is the most convenient option for government...
Streamlining Federal Travel Payments
Being somewhat technologically challenged, the evolution of electronic payments amazes me. My experience with making government payments began with the paper-based system. Receipt of a federal travel payment took weeks. Today the advancement in technology gives the federal agency the capability to pay the traveler and vendors, if not instantly, then within a few days. Previously, we issued travel advances in cash through use of an onsite imprest fund cashier. The traveler requested a voucher that authorized the cashier to disburse the cash to the recipient. Now, the traveler, if approved by the agency, receives a travel charge card for an individually billed account (IBA) to obtain travel advances and to pay for travel expenses. To receive a travel...
E-Tickets
The sight of travelers frantically searching for their tickets has become rare at airports in recent years. That’s because more people are relying on electronic tickets, or e-tickets, when they fly. E-ticket is now the main method of issuing tickets for the vast majority of airlines. It’s a secure form of ticketing that makes travel plans less cumbersome and more efficient for the traveler. The travel data is all stored electronically in the Global Distribution System (GDS) or the airlines reservation system. Passengers can, at any time, print their e-ticket receipt from the airlines web site. In addition, a passenger with an e-ticket can check in faster by just producing the e-ticket print out and an appropriate ID. E-tickets issued through the E Gov Travel...