06-13

Procurement Information Circular

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.

 

BACKGROUND:  Hurricane 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 --

  1. Record gift card purchase amounts and card balances on a spreadsheet, and keep all receipts.
  2. Document any returns in order to track all transactions on each gift card.
  3. Return the gift card to the buyer for filing with the order log.
  4. Utilize 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 canceled. 

 

HEADQUARTERS CONTACT:  Patrick Flynn, Contract Management Division, (202) 358-0460, pflynn@nasa.gov.

 

 

James Balinskas

Director, Contract Management Division

 

DISTRIBUTION:

  PIC List