What is delinquency?
The cardholder must pay all undisputed charges directly to the bank in full by the billing due date as printed on the billing statement. This date will be 25 to 30 days after the closing date on the statement, depending on the bank. The closing date is often referred to as the billing cycle date and is assigned by the card-issuing bank for your accounts. This date will generally be the same each month for all accounts under your control.
It is important to remember that under the terms of the GSA SmartPay® 2 Master Contract, an account is considered past due if payment for the undisputed principal amount has not been received within 45 calendar days from the closing date on the statement of account in which the charge appeared.
- The bank may suspend the account, unless otherwise directed by the program coordinator, if the payment for the undisputed principal amount has not been received 61 calendar days from the closing date on the statement of account in which the charge appeared.
- If payment for the undisputed principal amount has not been received 126 calendar days from the closing date on the statement of account in which the charge appeared, the card-issuing bank may cancel the account, unless otherwise directed by the program coordinator.
Another category of delinquency is credit losses (write-offs). Card-issuing banks are required to show balances older than 180 days as losses on their profit and loss statements. In turn, these losses are defined as write-offs by the bank. The bank may continue efforts to recover these losses after they have been written off.
How do I notify cardholders regarding past due accounts?
Notify the cardholder regarding past due accounts by:
- Letter/ correspondence/ memorandum
- Personal visit
Always document your contacts with cardholders regarding their delinquent accounts. If you contact the cardholder by telephone or personal visit, make a note of the date and time of the call/visit, the results of the call/visit, and any follow-up you or the cardholder agreed to. If you contact the cardholder by email, be sure to save the email. Keep a file copy of all written correspondence. It is important to keep your documentation so that there are records in the event of an audit, investigation, or later inquiry into a specific account.
Your agency/organization may have additional policies requiring you to notify the cardholder's supervisor, your Human Resources office, and/or your Finance office by sending them a list of delinquent travel charge cardholder accounts. Be sure to always comply with those policies.
How is action initiated on delinquent accounts?
You should become familiar with the policies and standards of conduct applicable to cardholders at your agency. Your agency may have developed a guidance that addresses the range of actions that may be taken in the event that the cardholder violates the agency policy.
You may be responsible for advising the appropriate personnel (e.g., the cardholder's supervisor, Human Resources, the Office of Inspector General, the agency/organization Ethics Official) when a cardholder has misused the card. You do not generally initiate the personnel action, but you may be called upon to provide supporting documentation.
How do I inform delinquent cardholders about disciplinary actions?
If you are required to do so by your agency/organization, inform cardholders who are delinquent that disciplinary actions may be taken by the agency/organization if payments for delinquent accounts are not received in a timely manner. You may be required to cite or provide a copy of the relevant agency policy pertaining to disciplinary actions.
Although travel charge card delinquency policies vary from agency to agency, you may be expected or required to remind cardholders of the consequences for repeated delinquencies and/or misuse of their travel charge card. Disciplinary actions that may occur, depending on the severity of the problem, include:
- Counseling/informal admonishment;
- Oral and/or written reprimand;
- Suspension without pay; and
- Removal from Federal service employment
In addition, it is important to notify cardholders that cancelled individually billed accounts may be:
- Reported to credit bureaus or similar entities by the bank, in accordance with the GSA SmartPay® 2 Master Contract;
- Referred to an outside collection agency by the bank, in accordance with the GSA SmartPay® 2 Master Contract; and
- Subject to late fees for which will not be reimbursed.
Why should my agency/organization care about delinquency?
As you now know, the liability for individually billed travel cards is the cardholder's, not the Government's. You may wonder why the Government should care whether an employee is delinquent in paying the amount owed on time.
There are a number of reasons why it is important to manage delinquency, such as:
- Federal employees must abide by the Standards of Official Conduct and agency ethics rules. (Visit the Office of Government Ethics website).
- Federal agencies are responsible for ensuring that employees follow the Federal Travel Regulation (FTR). (Visit the FTR website).
- As participants in the GSA SmartPay® 2 program, all agencies/organizations are responsible for following the terms of the GSA SmartPay® 2 Master Contract, including the requirements to ensure that cardholders use the card program correctly, monitor account activity, manage delinquency, and mitigate suspension/cancellation of accounts. (Visit the GSA SmartPay® 2 website for a copy of the GSA SmartPay® 2 Master Contract).
How can I track cardholder misuse and delinquency?
Use the bank's EAS exception reports to track misuse and delinquency.
What ethical standards apply to travel charge cardholders?
Executive agency cardholders are subject to the Standards of Official Conduct reissued on January 20, 2001, by President Bush. These standards require that:
- Public service is a trust, requiring cardholders to place loyalty to the Constitution, the laws, and ethical principles above private gain.
- Cardholders shall not use public office for private gain.
- Cardholders shall satisfy in good faith their obligations as citizens, including all just financial obligations, especially those - such as Federal, state, or local taxes - that are imposed by law.