<B> GSA Scraps Citi One-Card</B>
By Lynn Woods
The new one-card program that the federal General Services Administration awarded to Citibank represented one of the most innovative of the new credit card programs implemented by government agencies last year. But now GSA has scrapped the program, citing problems with the MCC codes that resulted in numerous instances of employees being billed for expenses for which they weren't supposed to be paying.
To clean up the mess, CitiBank is issuing new, separate travel and entertainment and purchasing cards to replace the 2,500 cards that combined both functions on one piece of plastic. "We're making sure no one has a dead card," said GSA director of financial initiatives Dennis Schroff. "A lot of planning was needed to make the transition."
While Schroff said that CitiBank "would have liked us to stick it out," GSA made its decision due to the "anguish" experienced by agency employees under the one-card program.
The main problem was limitations on the MCC codes that caused a T&E purchase to be incorrectly billed as a purchasing card transaction, and vice versa, said GSA officials. Transactions on itemized statements weren't coded properly, so a purchase for gas used in the company lawn mower, for example, would be categorized as a car rental and incorrectly charged to the employee.
"When people got bills for an office-purchasing transaction, they were upset," said an employee in the GSA's CFO office. "We've had problems with people not paying their bills."
To help minimize the problems, Citibank extended the grace period to employees who were wrongly billed and rebilled the agency--but that proved insufficient to stave off complaints.
Citibank vice president of government card services Gary Callen said the problem is rooted in the credit card terminals used by merchants, many of which do not have the ability to parse out different type of expenses and "send information to the appropriate buckets," he said. The success of a one-card program is really predicated on the behavior of the individual cardholder. "For the person who can control their buys, it works well."
While GSA has shelved the one-card option for now, Citibank is continuing to push ahead to meet demands from its key corporate customers, including General Motors. A GM spokesman was unavailable for comment by press time, but late last year, the automaker selected Citibank North America's e-Citi Group to consolidate its $500 million card account. GM awarded the single contract for T&E, purchasing, fleet, phone and an automated expense reporting system to e-Citi, which will subcontract it to Captura Software (<I>BTN,</I> Jan. 25).
"We've had a few bumps in the road, but the combi-card does work. There is demand for it," Callen said.
While the late 1998 implementation of many of the government's charge card programs, which were subject to such ground-breaking requirements as electronic reporting, have been plagued by problems, this is the first to be abandoned in favor of a conventional solution.
"We've selected a much cleaner break of transactions," Schroff said. "We hope the bank associations will see the shortcomings in the MCC coding and create additional codes."
Asked whether GSA had considered having employees double check their statements and recode charges where necessary, Schroff noted that "the idea was to eliminate the workload on our employees."
Schroff said GSA hasn't entirely abandoned the use of a one-card. On June 1, it launched a smart-card pilot program for 50 employees in its central office and 350 staffers at the new Federal Telecommunications Building in Virginia.
The card will allow employees to charge T&E and purchasing expenses, and also serve as their ID card, providing access to the building, rooms within the building, and their personal computers. It also can be used as a Sprint calling card and will enable holders to bypass the checkin procedure on American Airlines flights.