Inspection and Acceptance (Receipt of Supplies and Services)
Account holders, when possible, should use a third party to document independent inspection and acceptance of supplies and services they order or obtain in person. This simply means having another government employee sign off on the receipt or other purchase documentation verifying that the supplies/services were inspected and accepted. In some cases, such as when making an emergency purchase or when no other government employee is available, independent inspection and acceptance may be impossible. If that is the case, the account holder must document that independent inspection and acceptance was not possible and why.
Inspect each product to verify that it is in good condition with no visible damage or defects and the items meet the requirements of the purchase (color, size, quantity, etc.). Account holders should also verify that the purchase documentation (receipts, packing lists, shipping documents, etc.) matches what is provided by the merchant and that all requirements of the purchase are fulfilled. For services, verify that the work done is satisfactory. If upon inspection, all terms of the order as described above are fulfilled, the products or services may be accepted.
In the event the items purchased are defective, damaged, or otherwise do not comply with the account holder’s order, the account holder shall attempt to resolve these issues as soon as possible directly with the merchant. Similarly, if services provided are not satisfactory, the account holder shall address deficiencies immediately and directly with the merchant and prior to payment, if possible.
If the payment has already been made on the GSA SmartPay purchase account and the merchant has failed to resolve issues satisfactorily, the account holder should dispute the transaction with the contractor bank as soon as possible. According to the GSA SmartPay Master Contract, the account holder is responsible for notifying the contractor bank of any
items in dispute and shall have 90 calendar days from the transaction date to initiate a dispute, unless otherwise specified by the agency/organization.
Note: Account holders who fail to timely dispute erroneous or incorrect purchases may become personally liable for that purchase.
Because GSA SmartPay purchase accounts are frequently used to obtain sensitive items, an accurate property tracking system should be in place. Sensitive property includes items that are susceptible to loss, misuse or theft, such as mobile phones, laptops, monitors and printers.
Accountability for Items Purchased
Each year, agencies acquire billions of dollars of property with GSA SmartPay purchase accounts. This means that the account holder’s responsibilities do not end when an item they purchased is inspected and accepted. The purchased item must be properly accounted for in accordance with applicable federal and agency policies and regulations.
Supplies and services purchased with a GSA SmartPay purchase account are for official use only. For example, an iPad purchased to view podcasts of work-related presentations and lectures should not also be used to store personal music and photos, nor should it be engraved with the user’s name. At any time, property could be taken back by the issuing activity or program and re-issued to another person within that program.
Check with your agency policy on governing accountability for sensitive property. Account holders shall ensure applicable Federal and agency accountability procedures are followed for property for which they are responsible. This activity includes providing information to agency/organization property officers and/or systems on items purchased, excluding consumables.
If the account holder is purchasing an item for another government employee, that employee is the user of that property and is therefore responsible for ensuring the proper accounting of that property. However, account holders should ensure they have documentation in their file demonstrating that the property acquired was delivered to another party and is no longer their responsibility.
Account holders must be familiar with and comply with their organization’s policies regarding property management. This includes coordinating with your servicing property officer and appropriate custodians to ensure that all sensitive and otherwise accountable property is recorded in the applicable property tracking system, consistent with your agency’s policies and procedures. Account holders shall also familiarize themselves with agency policies for reporting property they acquired with a GSA SmartPay account that is missing, stolen or damaged after the initial receipt process.
If you need to cancel an order, immediately contact the merchant. Immediately contacting the merchant allows you to cancel before the item has been shipped. If the merchant has already processed the transaction, a credit should be issued. If the merchant has not processed the transaction, simply cancel the order. Special order items may include a restocking charge.
Returning a Purchase
Return policies can vary by merchant. Merchants are responsible for establishing their own return and adjustment policies with their customers. If the return policy is unclear when making a purchase, please ask the merchant for clarification to avoid future misunderstandings. Merchants are required to disclose their return policies to the customer before the completion of a transaction.
By accepting the GSA SmartPay purchase account as payment, merchants agree to refund or replace any defective items. The first step to obtaining redress is to work with the merchant on a resolution. This is usually a refund or replacement of the defective item. If the merchant refuses to issue a credit voucher, you must dispute the transaction through the issuing contractor bank.
Obtaining Sales Receipt Copies
Obtain and save a copy of your sales receipts. You need a copy of a sales receipt in order to verify the purchase when reconciling your statement. If you misplaced the sales receipt and need a copy to verify an item on your statement, contact the merchant directly. If getting a reprinted receipt isn’t an option, contact your contractor bank to send you a copy.
What happens if you make a purchase that was not approved?
If it has been determined that the item cannot be returned, the Government must pay for the purchase and recoup the amount of the purchase from YOU! That is why it is important to fully understand what can and cannot be purchased with the GSA SmartPay purchase account, and ensure that your Approving Official is aware in advance of what you are purchasing.
Reconciling a Credit
On occasion your statement will show a credit for a transaction that took place in a prior billing period. An example would be a credit for a returned item. When you get a credit several months after the original purchase, reconcile back to the original purchase documentation and note that the credit was received.
Some agencies allow for the use of convenience checks. Convenience Checks are a contractor-provided instrument that is written, dated and signed against an account within established dollar limits. Convenience checks are intended only for the use with merchants that do not accept the GSA SmartPay purchase account. Convenience checks should be used as a payment method of last resort, only when no reasonable alternative merchant is available who accepts the GSA SmartPay purchase account.
If your agency/organization determines a need for convenience checks, your contractor bank will provide a supply of checks to the designated account holder drawn on the account holder's purchase account. The checks will be processed as they are presented for payment.
Convenience checks are multi-copied (one copy for the account holder's records; the original for the merchant). Due to the increased potential of fraud and abuse, specialized training on convenience checks is required prior to being authorized to write checks. If any misuse or abuse is discovered, the employee will lose convenience check and purchase account privileges. That employee will then be referred for disciplinary action in accordance with agency procedure.
Convenience checks may NOT be written for purchases above the maximum dollar limit established by your agency. In addition, convenience checks may NOT be written to:
- Vendors who accept the GSA SmartPay purchase account;
- Vendor transactions already under another method of acquisition (purchase orders, contracts, etc);
- Employee reimbursements;
- Cash advances;
- Salary payments, cash awards, or any transaction processed through the payroll system;
- Travel-related transportation tickets;
- Meals or lodging related to employee travel except as related to emergency incident response; and
- Other restrictions as determined by agency policy.
Checks must be used in sequential order. Each convenience check must be entered in a check register or log for tracking purposes. The following information must be written on each check:
- Date the check is being issued
- The name of the payee
- Amount of the check
- An original signature
The IRS requires that information be collected for reporting income to the IRS when a convenience check is used for purchases of services. If a person is “engaged in a trade or business and, in the course of that trade or business, pays any person $600 or more of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits and income during a calendar year, Internal Revenue Service (IRS) Code Section 6041 generally requires them to file an information return with the IRS and to furnish an information statement to the payee.”
The IRS states that Agencies may rely on the merchant category code (MCC) in determining whether a transaction is subject to Form 1099 reporting. Failure to file a correct information return (Form 1099) by the due date may result in a penalty imposed by the IRS.