November 16, 2006
GIFT CARDS PURCHASED
WITH GOVERNMENT PURCHASE CARDS DURING EMERGENCY SITUATIONS
PURPOSE: To provide policies, procedures, and
internal controls for using gift cards purchased with government purchase cards
during emergency situations.
Katrina was the costliest and one of the deadliest hurricanes in the history of
the United States,
devastating the north-central Gulf
Coast in late August,
2005. Under the auspices of the
President’s Council on Integrity and Efficiency Homeland
Security Roundtable, NASA’s Assistant Inspector General for Auditing reviewed
NASA’s relief and recovery procurement actions, including purchase card
transactions, to determine whether NASA established the necessary internal
controls to manage Hurricane Katrina recovery and reconstruction. Although the IG found the procurement methods
employed to be appropriate for expeditiously providing vitally needed products
and services in response to the emergency situation, and verified that all
procurements were executed for Katrina recovery and reconstruction efforts and
complied with relevant policies and procedures, certain deficiencies were
specified in report number ML-06-009 dated August 29, 2006. This PIC addresses the procurement-related
deficiency, specifically, that NASA lacked policies, procedures, and internal
controls for gift cards used to purchase emergency items.
GUIDANCE: Purchase card procedures are intended to reduce
administrative costs, promote efficiency and economy in contracting; and avoid
unnecessary burdens for agencies and contractors. (FAR 13.002)
Use of “gift cards”, “cash cards” and other proprietary
credit instruments sold by retail “clubs” shall be minimized. They may be used
only in emergencies when no other procurement method is possible, because of
the exigency of the circumstances.
Retail “clubs” (e.g., Wal-mart’s “Sam’s Club”) and other sources that
might not accept the Government purchase card might accept convenience checks
instead. Contingency planning should
include consideration of this procurement option if these sources are available
for possible use in emergencies.
If Government purchase cards are used to purchase gift cards
or similar instruments, the following policies, procedures, and internal
controls apply. Centers must --
gift card purchase amounts and card balances on a spreadsheet, and keep
any returns in order to track all transactions on each gift card.
the gift card to the buyer for filing with the order log.
a separate spreadsheet to associate a gift card number with the actual
purchaser. Other relevant policies, including FAR, NFS, and the Purchase
Card Internal Control and Audit Plan, continue to apply.
EFFECTIVE DATE: This PIC is effective as dated and shall
remain in effect until the guidance is incorporated into the Purchase Card
Audit and Internal Control Plan, or until it is otherwise superseded or
HEADQUARTERS CONTACT: Patrick Flynn, Contract Management Division,
(202) 358-0460, firstname.lastname@example.org.
Director, Contract Management Division