USDA says bank errors stalled IMPAC service

Vendors rejected U.S. Bank-issued IMPAC cards when Agriculture users tried to buy supplies, department officials say. Overbilling was partly to blame.

Accounting errors and a computer glitch by the provider of its IMPAC credit cards left Agriculture Department employees without use of their cards for three days recently, USDA officials said.

U.S. Bank of Minneapolis first halted card services June 23 and 24, which left Forest Service employees fighting wildfires in Florida with no means to buy supplies, a department official said. A hardware store in Florida rejected the cards when Forest Service employees tried to use them to buy picks and shovels.

“It was a big inconvenience,” said Sue Poetz, the department’s program manager for the procurement modernization team. “Our team in Florida was extremely frustrated.”

A bank official said he was unaware of any halt in card services. “I know of no problems with our IMPAC cards lately,” said Chris Pieroth, senior vice president of government products for U.S. Bank. Bank officials did not return a reporter’s calls seeking further details about the IMPAC service problems.

U.S. Bank issues the cards to Agriculture, the Defense Department and other federal agencies under a General Services Administration contract. Government employees use the cards to buy work-related supplies and, in some cases, to pay for travel and lodging. At least 16,000 Agriculture employees use the IMPAC cards.

The June failures occurred after the bank’s systems registered Agriculture as hitting its 30-day, $10 million spending limit, Poetz said.

Apparently two accounting errors led to the miscalculation by the bank. Poetz said the bank had not recorded department payments and also had overbilled USDA for its current transactions. In USDA’s account, the bank billed $600,000 worth of transactions as $1.2 million, she said.

To immediately deal with the problem, U.S. Bank has increased the department’s monthly limit to $20 million through the summer, Poetz said.

USDA employees again had their card service halted on July 9, Poetz said. Vendors rejected cards when Agriculture employees in California, Georgia, Florida and Pennsylvania tried to use them, she said.

The July IMPAC card failure was caused by a U.S. Bank computer glitch, which the bank corrected in about an hour, Poetz said.

The bank’s systems failed to properly identify USDA’s payment as a government IMPAC transaction, she said.

The halt in card service is a hindrance to Agriculture work, Poetz said. “The credit card is a value,” she said. “It is extremely important for us to get goods and services to the front lines in the summer, which is when the forest-fighting season is heaviest.”

Poetz and other Agriculture officials met with U.S. Bank representatives late last week to discuss the service halts.

DOD in June awarded a 10-year contract to U.S. Bank for IMPAC cards. DOD is the largest user of the government purchase cards, making up more than 50 percent of the $5 billion in federal IMPAC sales last year [GCN, June 22, Page 6].

The Postal Service and the Health and Human Services Department also signed IMPAC agreements with U.S. Bank earlier this month. Under a five-year, $320 million contract, which takes effect Dec. 1, U.S. Bank will have exclusive rights to issue IMPAC cards to USPS. The contract comes with five one-year renewal options.