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Agency/Organization Program Coordinators (A/OPCs) Travel Training

Lesson 6: Delinquency

What is delinquency?

Delinquency is an undisputed account balance that is unpaid for the prescribed number of calendar days or more past the statement due date. The statement due date will generally be 25 to 30 days after the closing date on the statement, depending on the contractor bank. The closing date is often referred to as the billing cycle date and is assigned by the contractor bank for your accounts and will generally be the same each month for all accounts under your control.

For an IBA account, liability for all charges rests with the individual card/account holder. If the card/account holder fails to pay his/her account on a timely basis, it will be considered delinquent and the contractor bank may suspend or cancel the account and assess late charges and fees. The agency/organization is never responsible or legally liable for the account.

It is important to remember that under the terms of the GSA SmartPay® 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 billing date in which the charge appeared.

  • Suspending an account: The bank may suspend the account, unless otherwise directed by the A/OPC, if the payment for the undisputed principal amount has not been received 61 calendar days from the billing date in which the charge appeared.
  • Canceling an account: If payment for the undisputed principal amount has not been received 126 calendar days from the billing date in which the charge appeared, the contractor bank may cancel the account, unless otherwise directed by the A/OPC.

How do I notify card/account holders regarding past due accounts?

Notify a card/account holder regarding past due accounts by:

  • Email.
  • Letter/correspondence/memorandum.
  • Personal visit.
  • Phone.

Always document your contacts with card/account holders regarding their delinquent accounts. 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.

For example, if you contact the card/account holder 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 card/account holder agreed to. Or, if you contact the card/account holder by email, be sure to save the email. Keep a file copy of all written correspondence.

Please note that your agency/organization may have additional policies requiring notifying the card/account holder’s supervisor, your human resources office and/or your finance office by sending a list of delinquent travel cards/accounts. Be sure to always comply with your agency’s policy.

How is action initiated on delinquent accounts?

You should become familiar with the policies and standards of conduct applicable to card/account holders at your agency. Your agency may have developed guidance that addresses the range of actions that may be taken in the event that the card/account holder violates agency policy. You may be responsible for advising the appropriate personnel (such as the card/account holder’s supervisor, Human Resources, the IG and the agency/organization ethics official) when a card/account holder has misused their account. Generally, you will not initiate the personnel action, but you may be called upon to provide supporting documentation.

How do I inform delinquent card/account holders about disciplinary actions?

If you are required to do so by your agency/organization, inform card/account holders 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 card/account delinquency policies vary from agency to agency, you may be expected or required to remind card/account holders of the consequences for repeated delinquencies and/or misuse of their travel card/account. You are also encouraged to work with your Human Resources office, your legal office and anyone else who may need to be involved in the disciplinary action process.

Disciplinary actions that may occur, depending on the severity of the problem, include:

  • Counseling/informal admonishment.
  • Oral and/or written reprimand.
  • Suspension without pay.
  • Removal from federal service employment.

In addition, in accordance with agency-specific policy, it is important to notify card/account holders with canceled IBAs that the delinquency may be:

  • Reported to credit bureaus or similar entities by the contractor bank.
  • Referred to an outside collection agency by the contractor bank.
  • Subject to late fees for which will not be reimbursed.

Please note that agencies/organizations may elect to allow the contractor bank to charge their standard commercial late fee in accordance with standard commercial practice; however, inclusion of standard commercial late fees at the task order level is contingent upon the agency’s/organization’s successful negotiations with union officials, as appropriate and at the sole discretion of the agency/organization. For more information, see the GSA SmartPay Master Contract, Section C.

Why should my agency/organization care about delinquency?

Liability for an IBA is the card/account holder’s responsibility, not the government’s responsibility. So, why should the government 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. See the Office of Government Ethics.
  • Federal agencies are responsible for ensuring that employees follow the Federal Travel Regulation (FTR) and Joint Travel Regulations (JTR) for DoD.
  • As participants in the GSA SmartPay program, all agencies/organizations are responsible for following the terms of the GSA SmartPay Master Contract, including the requirements to ensure that card/account holders use the account correctly, monitor account activity, manage delinquency, and mitigate suspension/cancellation of accounts.

How can I track a card/account holder’s delinquency?

Use the contractor bank’s EAS to pull and review the exception and delinquency reports.

What is salary offset?

The Travel and Transportation Reform Act of 1998 (Public Law 105-264) [PDF, 9 pages] mandates the use of the government contractor-issued travel card/account for all employees on official government business. The Act allows an agency to collect from an employee’s disposable pay any undisputed delinquent amounts that are owed to a contractor bank, upon written request from the contractor bank. This is known as salary offset.

Each agency must follow the due process requirements of the Act as presented in the Federal Travel Regulation (FTR) before collecting undisputed delinquent amounts on behalf of the contractor bank. Each agency must reach agreement with its bank on the process to be used for submission of the request and handling of the request internally.

Specific issues to be addressed by the agency include:

  • Determining whether the individual is still employed by the agency.
  • Determining whether the employee has been reimbursed for travel expenses.
  • Determining the amount of disposable pay available for collection. Salary may be subject to other garnishments, etc.
  • Payroll’s ability to process the request and provide a payment to the bank.
  • Legal compliance with the terms of the Act.
  • Union notification, if applicable.

A multifunctional team will be required to implement this process. Depending on your organization’s structure, this team would include the A/OPC and representatives from travel policy, payroll, human resources, labor relations and Office of the General Counsel. It is suggested that you work closely with your bank to establish a process that works for all parties.

What is split disbursement?

Split disbursement provides for payments to be made by the agency on behalf of the card/account holders. At the card/account holder’s direction and in accordance with agency policy, disbursement is split. The bank receives a direct payment by the agency of the card/account holder specified/claimed amount. The rest of the payment is disbursed to a card/account holder account or directly to the card/account holder. Large ticket items such as common carrier, hotel and rental car charges are commonly paid directly to the contractor bank on behalf of the card/account holder while other disbursements are paid to the employee.

Split disbursement is an effective tool to reduce delinquency and improve refunds paid to the agency. It will require coordination with the bank to ensure proper payments are made by the government and properly posted to a card/account holder’s account.


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