1.35.4. Purchase Card Program

(1) The FAR, Subpart 13.2 states that the purchase card is the preferred method of making and paying for micro purchases.

(2) The purchase credit card program is for IRS employees who are authorized to purchase goods and/or services for official government business. It is also for supervisory and administrative personnel who authorize, direct or review the activities of purchase cardholders.

(1) The authorities for this IRM include:

1. Office of Management and Budget (OMB) Circular A-123, Appendix B: A Risk Management Framework for Government Charge Card Programs

2. FAR Part 13, Simplified Acquisition Procedures

3. The Government Charge Card Abuse Prevention Act of 2012

4. FAR Part 8, Required Sources of Supplies and Services

5. Treasury Charge Card Management Plan

6. Department of Treasury Acquisition Procedures

(1) This section provides responsibilities for:

1. CFO, Deputy CFO and Senior Associate CFO for Financial Management

2. Chief Procurement Officer and Office of Procurement Policy

3. Credit Card Services Office

4. Purchase card approving officials

5. Purchase cardholders

6. Convenience check program manager

7. Convenience check program coordinator

(1) Program reports to Treasury and TIGTA: Credit Card Services prepares reports quarterly and semi-annually. Some of these reports are used to monitor policy compliance with the Government Charge Card Abuse Prevention Act of 2012 requirements.

(2) The following chart lists the reports and their reporting frequency:

(3) Program effectiveness is measured through a series of transaction reviews:

1. Credit Card Services conducts monthly and quarterly transaction reviews to determine cardholder compliance with current guidelines and program effectiveness.

2. TIGTA conducts a semi-annual audit to assess IRS’s implementation and compliance with the Charge Card Abuse Prevention Act of 2012 requirements and provides a final report.

(1) Appendix B to OMB Circular A-123, Improving the Management of Government Charge Card Programs, mandates agencies to have internal controls that include standard minimum requirements for the issuance and retention of a PC to reduce the administrative costs associated with the government PC.

(1) The following terms and definitions apply to this program:

1. Authorization - The process undertaken by a vendor to verify that a purchase is allowable on a particular purchase cardholder account. Vendors sometimes seek authorization if a purchase exceeds certain dollar limits (e.g., $25 or $50). When a vendor seeks authorization for a purchase, the MasterCard authorization system will compare the proposed transaction with the limitations placed on the purchase cardholder’s account.

2. Billing cycle - The period of time commencing on the 4th of each month and ending on the 3rd of the following month. All transactions that post to an account during a billing cycle are summarized on a statement of account.

3. Bulk (or "block") funding - A method of setting aside funds for multiple purchases that may be shared by multiple purchase cardholders. Bulk funding eliminates the requirement for a separate requisition for each purchase. Funds for a general type expense, such as basic desktop office supplies, are approved and funded for purchase in advance. Bulk funding does not eliminate the requirement that purchases must be approved prior to using the PC.

4. Card limit - The maximum cumulative amount that can be charged to a PC in any one billing cycle. The PC limits are used to strengthen internal controls by establishing the appropriate amount a purchase cardholder can spend in a billing cycle to accomplish their program responsibilities.

5. Certificate of Appointment - A Standard Form 1402 is used for appointing contracting officers and is required for procurement authority exceeding the micro-purchase threshold.

6. Convenience check - An alternative form of payment associated with a PC account limited to $2,500 for goods/services and $2,000 for construction/alterations. Convenience checks can only be used where the vendor does not accept the PC or other methods of payment cannot be used and the request is for safety, security and/or enforcement.

7. Delegation of Procurement Authority (DPA) - A written DPA is required for micro-purchase authority (e.g., government wide commercial purchase cardholder, convenience check holder). An individual DPA issued to a micro-purchase cardholder through the Integrated Talent Management (ITM) providing their card limits and scope of purchasing authority. Purchase cardholders are required to acknowledge their individual DPA through the ITM system.

8. Disputed item - An erroneous, duplicate or over charge that appears as a transaction on an individually billed government purchase cardholder's statement of account or on the transaction screen in the Purchase Card Module.

9. Merchant category code (MCC) - A standard code assigned to every vendor that accepts a credit card that identifies the category of goods, services or activity they are involved with. The accuracy of the assigned MCC is the function of the vendor and MasterCard.

10. Merchant category code (MCC) template - A grouping of codes that are assigned to each purchase cardholder's account based on their anticipated purchasing activity. An MCC template is an element of the system of internal controls for the credit card program, helping to reduce the potential for inappropriate use of a PC.

11. Micro-purchase - An acquisition of supplies with an aggregate (total cost of purchase determined by total need) purchase amount that does not exceed $10,000 ($2,500 for services; $2,000 for construction).

12. Purchase Card Module - A customized system developed alongside IFS to provide the purchase cardholder the ability to electronically fund, associate, reconcile and monitor purchase card transactions. This system enhances internal controls and ensures timely posting of obligations and payments to the financial system.

13. Purchase card (PC) - The credit card used to purchase goods and services for IRS official government use only.

14. Purchase card (PC) approving official - An individual with oversight and approval responsibility for PC activity of the purchase cardholders under his or her purview.

15. Purchase card (PC) approving official designee - A PC approving official who is designated to approve another PC approving official's cardholders’ transactions in the Purchase Card Module. Designation as an acting manager does not confer authority to act as PC approving official. The designee must be from the same business unit as the PC approving official and must be a PC approving official for a group of purchase cardholders.

16. Purchase Card Electronic Documentation Retention (PCEDR) - A SharePoint site that houses purchase card documentation prior to July 2021.

17. PC reference document - The PC reference document is a tool which assists purchase cardholders with determining if a PC may be used to make support-type purchases.

18. Purchase cardholder - An IRS employee who has been given a Delegation of Procurement Authority (DPA) and is authorized to make purchases using the PC. The purchase cardholder is the only user of the PC and is responsible for safeguarding the PC and account number to minimize the opportunity for theft or unauthorized use.

19. Required sources - Vendors deemed by FAR Part 8 as prioritized required sources for supplies and services.

20. Restricted Purchase List - Written guidance with a list of goods and services that IRS employees are prohibited from purchasing or items that can only be purchased with the appropriate approvals. The Restricted Purchase List is maintained by the Office of Procurement Policy.

21. Single transaction limit - The PC dollar limit for any one transaction. The maximum allowable micro-purchase single transaction limit is $10,000 ($2,500 for services; $2,000 for construction/alterations). The maximum allowable single transaction limit applies to all purchase cardholders except those with contracting warrants.

22. Split purchase - A series of purchases from the same vendor on the same day in a total amount that exceeds his/her single transaction limit ($10,000 goods, $2,500 for services and $2,000 for construction). A purchase cardholder may not make a split purchase under any circumstances.

23. Statement of account - A summary of transactions (debits and credits) posted to the purchase cardholder's account during the billing cycle.

24. Tax exemption - PC purchases made and paid directly by the federal government are tax exempt where the government is responsible for the payment. Purchase cardholders can access the tax exemption letter for states and commonwealths prior to conducting official business.

25. Vendor - The source of goods or services purchased. The vendor can be an individual or any type of business entity.

(1) The following acronyms apply to this program:

(1) Related resources for this IRM include:

1. IRM 1.32.4, Government Travel Card Program

(1) Criteria have been established to ensure that each PC is issued to responsible IRS employees who have a need and will adhere to all PC policies and procedures. These guidelines also address requirements for PC approving officials who likewise must adhere to established PC policies and procedures and must ensure that their purchase cardholders properly follow all policies and procedures.

(1) The micro-purchase card is a MasterCard issued to authorized individuals to purchase goods and services for official IRS government use. Purchases must be less than or equal to the single purchase transaction limit for the purchase cardholder's account. Transaction limits are based on the business needs of the purchase cardholder. The maximum single purchase transaction limit for micro-purchases is $10,000 ($2,500 for services, $2,000 for construction/alterations). All prospective purchase cardholders, regardless of the card type, must complete formal training before a PC is issued.

(1) Revenue officers directly involved with enforcement activity are issued a micro-purchase card that is restricted to enforcement related buys. Enforcement purchase cardholders cannot use their PC to purchase office supplies or routine services. SB/SE collection territory management assistants who have been issued a micro-purchase card for supplies and services may have enforcement purchase authority added to the card.

(1) Criminal investigators directly involved with enforcement activity are issued a PC that is restricted to enforcement related buys. CI enforcement purchase cardholders cannot use their card to purchase routine office supplies and services.

(1) Convenience checks are an alternative form of payment for specific programs where other methods of payment cannot be used. Convenience checks are associated with a PC account established with the government credit card contractor.

(2) Convenience checks should be used as a payment method of last resort only when no reasonable alternative vendor is available who accepts the PC and can only be used when the request is for safety, security or enforcement.

(1) Purchase cardholders procuring supplies or services greater than $10,000 ($2,500 for services; $2,000 for construction) must comply with all procurement laws and regulations, including competition, small business requirements and all instructions contained in the electronic Purchase Card Guide. Purchase cardholders must also comply with the limitations of their Certificate of Appointment.

(1) The PC can only be used to purchase goods and services for official government use and:

1. Must follow IRS and business unit guidelines.

2. Be approved in advance of the purchase.

3. Be funded and documented in the PC Module order log prior to making the purchase.

4. Are within the purchase cardholder's assigned single transaction and monthly card limits as established in their individual DPA.

(1) The PC cannot be used to purchase:

1. Items for personal use

2. Prohibited and/or restricted items

3. Official travel-related expenses

4. Fuel for IRS owned or General Services Administration vehicles

5. Vehicle repairs/maintenance

6. Items without prior funding and approval

7. Items that exceed the micro-purchase threshold unless otherwise granted written delegated authority as evidenced by a Certificate of Appointment

8. Business and personal phone calls

9. NDAA Section 889 certification requirements not met for open market vendors

(2) See the Restricted Purchase List and IRM 1.32.4, Government Travel Card Program, for additional guidance.

(1) PC accounts are restricted by MCC and monthly and single transaction/dollar limits. If the PC is declined by a vendor because of a restriction, contact Credit Card Services through IRS Service Central.

(1) A purchase cardholder may not make a series of purchases from the same vendor on the same day in a total amount that exceeds his/her single transaction limit. This is true even if the purchase cardholder is ordering from the federal supply schedule contract.

(2) For most purchase cardholders, the single transaction limit is $10,000 ($2,500 for services, $2,000 for construction/alterations). Purchase requirements exceeding the single transaction limit must be processed by Procurement. The split purchase rules also apply to the maximum allowable of $2,500 for convenience checks.

(3) Splitting purchases is considered inappropriate use and is a conduct issue that could result in disciplinary action.

(1) Inappropriate use can be summarized in several general categories as follows:

1. Personal use items

2. Prohibited or restricted purchases

3. Using the incorrect card (e.g., using the PC to make an official travel purchase)

4. Purchases made without prior funding or required approvals

5. Altered orders: purchases that do not match the approved request

6. Purchases exceeding the purchase cardholder's single transaction limit

7. Purchases made by someone other than the purchase cardholder

8. Split purchases

(2) Inappropriate use of the PC is a conduct issue that could result in disciplinary action. The Inappropriate Use Guide contains specific instances of misuse of the PC and their resolutions. The IRS Manager's Guide to Penalty Determinations provides Labor Relations guidance for penalty determinations for the misuse of the PC.

(3) Personal use of the PC may require the IRS “to take steps to recover the cost of any illegal, improper or erroneous purchase” that results in loss to the government made with a PC or convenience check per the Government Charge Card Abuse Prevention Act of 2012.

(4) See the Restricted Purchase List and IRM 1.35.4.3.4, Split Purchases, for additional guidance.

(1) IRS acquisition policy requires separation of duties associated with approval, funding, procurement and acceptance to minimize opportunities for unauthorized, fraudulent or otherwise improper acts. Separation of duties of purchase cardholders, PC approving officials and funding officials is necessary to avoid situations where one employee or a small group of employees performs more than one step in the process.

(2) Purchase cardholders are allowed to conduct the purchase and receive supplies or services. Separation of duties guidance for participants in the PC program is as follows:

1. A PC approving official cannot be a cardholder.

2. A cardholder cannot be a PC approving official.

3. A cardholder or a PC approving official cannot be a plan manager.

4. A PC approving official cannot be subordinate (organizationally) to a cardholder unless an exception is granted by Credit Card Services.

(3) Span of control is required by the OMB Circular A-123, Appendix B: Improving the Management of Government Charge Card Programs for PC approving officials and is based on the number of transactions approved per billing cycle.

(1) The electronic Purchase Card Guide summarizes IRS policies and procedures relating to use of the PC. The procedures outlined in the guide apply to all IRS business units. The procedures may be supplemented by operating guidelines issued within a business unit. The electronic Purchase Card Guide is maintained as an electronic reference document.

(2) See the Purchase Card Guide for additional guidance.

(1) The Office of Procurement Policy provides guidance on restricted goods and services that purchase cardholders are prohibited from buying or that can only be purchased with the appropriate approvals. Purchase cardholders must be familiar with these restrictions and review the Restricted Purchase List before making a purchase. Business units may further limit what can be purchased with the PC. These restrictions can be found in the operating guidelines issued by the business unit.

(1) Office supplies must be purchased from mandatory supply schedules. Purchases must be made according to the priority listing chart located in the electronic Purchase Card Guide.

(2) For approved purchases other than office supplies, see FAR Part 8, Required Sources of Supplies and Services, for the priority of sources.

(3) See the Purchase Card Guide for additional guidance.

(1) All Information and Communication Technology (ICT) purchases made with the government PC must comply with Section 508 of the Rehabilitation Act of 1973.

(2) Section 508 requires that when federal agencies develop, procure, maintain or use ICT, they must ensure that:

1. Federal employees with disabilities have access to and use of information and data that is comparable to that of federal employees who are not individuals with disabilities unless an undue burden would be imposed on the agency.

2. Individuals with disabilities, who are members of the public seeking information or services from the agency, have access to use information and data that is comparably provided to the public who are not individuals with disabilities.

(3) Requesters or purchase cardholders must perform market research to find a product that conforms to Section 508, if applicable. Proper supporting documentation for the PC transaction is required.

(4) For ICT purchases $10,000 or less, Section 508 requires the completion of the Accessibility Requirement Tool (ART) and the report maintained as part of the supporting documentation.

(5) For ICT purchases that are $10,000 or greater, Section 508 requires that an ART report be completed and signed by the division director. A copy of a Determination and Findings or Undue Burden Exception Form, along with the approval confirmation, must be printed and maintained as part of the supporting documentation for each PC transaction.

(1) The required retention period for all PC documentation is six years from the cycle ending date of the purchase. See the General Records Schedule 1.1 for additional guidance.

(2) Purchase cardholders and convenience check cardholders must attach their receipts to the Purchase Card Module order log for PC approving official review and approval immediately after reconciliation.

(1) All prospective purchase cardholders must complete the Micro-Purchase Card Training Curriculum and, if necessary, the required training for their assigned program before a PC will be issued. Cardholders with procurement authority over the micro-purchase threshold must complete additional requirements specified in the Treasury Acquisition Certification Management Program Handbook.

(2) PC training requirements for specific card types:

(1) Each business unit designates employees to be PC approving officials and complete an eligibility form prior to enrollment in the PC Approving Official Training Curriculum.

(2) Prospective PC approving officials begin the enrollment process by completing the purchase card approving official training request form found on the IRS Source Credit Card Services narratives.

(1) Purchase cardholders and PC approving officials are required to complete refresher training every two years.

(2) Purchase cardholders and PC approving officials will be notified by email with detailed instructions when they are required to complete refresher training within 60 days of receipt.

(1) Purchase cardholders must create and add a funded requisition to a PC order log prior to making a purchase. The PC order log tracks each step of a purchase and documents transaction details.

(2) When goods or services are received, the PC order log item received date field must be updated.

(1) Purchase cardholders must associate/reconcile and PC approving officials must approve transactions within 10 business days of the transaction download date in the Purchase Card Module.

(2) In the absence of the purchase cardholder, the PC approving official must review, associate and approve transactions. In addition, the PC approving official must indicate when the purchase cardholder is expected to return in the comments area in the Purchase Card Module. When the purchase cardholder returns to the office, they must reconcile all transactions within five business days.

(3) In the absence of the PC approving official, the purchase cardholder must have another trained, established PC approving official designee in the same business unit to review and approve transactions. The PC approving official designee should be selected in advance of the projected PC approving official's absence date.

(4) An IRS Service Central ticket should be submitted if the purchase cardholder or PC approving official require assistance with the selection of a PC approving official designee.

(5) The overall processing time frame is not extended as a result of the absence of a purchase cardholder or PC approving official.

(1) Purchase cardholders must complete required actions for each purchase:

1. Reconcile and attach their supporting documentation to the Purchase Card Module order log for PC approving official review and approval immediately after reconciliation.

2. Modify the existing requisition to increase the amount of funds or create a new requisition to pay for erroneous charges.

3. Update the PC order log item to reflect full or partial receipt of items.