OAS and Micropurchases

An October 30th newsletter from NBC News 4 I-Team in Washington, D.C. provided yet another view on wasteful and inappropriate government spending. While wasteful spending is often linked to billion dollar software fiascos or $600 hammers, this article had a different focus. It highlighted the widespread use of government purchase cards to make questionable micro-purchases.

Micro-purchases are limited to $3,000 per buy and are intended to support government simplified acquisition procedures for smaller transactions. The problem is that when you have 3.5 million cards in use by government employees the small dollars per buy become major expenditures in total. How much? Try $20 billion in less than one year.

The problem with micro-purchases is that, in most cases, they remain confidential and are not publically disclosed without FOIA (Freedom of Information Act) access. With so little transparency it should not be surprising that $10,000 was spent at one Starbucks over a 6 month period. While scandals do sell a lot of magazines, a better use of this information would be to promote ways of making improvements in controls over micro-purchases that can uncover and reduce abuse.

OAS has a proven record of detecting and stopping potential misuse before the purchase is completed. This is easier where transactions are handled wholly within OAS and order processing activities (and approvals) can match agency policies and procedures. In the case of transactions which are done outside OAS, particularly for high volumes of small transactions, a more creative approach is required.

OAS can offer flexible solutions to manage micro-purchases. For example:

  • Import credit card purchases into OAS to uncover areas of potential abuse.
  • Group high volumes of smaller purchases to initiate vendor price negotiations.
  • Create ways to move high volume purchases into OAS:
    • Create orders in OAS for purchase of gift cards.  Receipts can be scanned into a document in OAS as an attachment.  After the card has been materially spent the order will be routed for final approvals.
    • For larger micro-purchase orders OAS can be set up with a Workflow to provide pre-approval of the order amount and routed for final approval with scanned copies of receipts when the buy is completed outside OAS.

OAS flexibility can customize a process that enables accountability solutions for virtually any kind of transaction, even those occurring largely outside OAS.