Section I: Purchase Charge Card Program Overview

8. What are convenience checks?

Convenience checks are a useful tool when the Purchase Charge Card is not accepted. Convenience checks are Contractor-provided check that is written on a card/account within established dollar limits. When use of the Purchase Charge Card is not possible (e.g., the merchant refuses to accept the Purchase Charge Card), convenience checks provide increased flexibility to acquire supplies and services in a timely manner. Convenience check transactions are similar to regular Purchase Charge Card transactions in that they are listed as line items on the monthly cardholder statement and the invoice.

There is no authorization process for convenience checks. Agencies may elect to have a dollar limit imprinted on the check but there is no automated process to pre-approve the amount of the purchase. Due to the nature of this product, additional care should be taken in managing these accounts. For example:

• Work with the Contractor to implement a convenience check program.
• Be able to determine cotents of custom tex field on the front of each account's checks (e.g. maximum value of check, tax exempt status).
• If a stop payment on the convenience check is requested by you, make sure that it there is no cost to the Government.
• Monitor the convenience checks using the payment procedures established by the Contractor. Make sure that payment for these checks do not occur prior to use.
• Checks should be secured at all times to ensure against physical theft. Checks are negotiable instruments and are to be stored in a locked container, such as a safe or metal filing cabinet. Checks must be accounted for appropriately to prevent loss, theft or potential forgery.
• The number of accounts should be limited to reduce risk.
• The number of checks on hand should be limited to reduce risk.
• Merchant Category Codes (MCC) and spend limits cannot be blocked
• The agency bears the responsibility for paying all check fees and 1099 tax reporting
• Before a check is issued, every reasonable effort should be made to use the Purchase Charge Card. Maximum efforts should be made to find and use vendors that accept the Purchase Charge Card. Due to the cost associated with convenience checks, the number of checks written should be kept to a minimum.

The Master Contract requires that the banks operate a convenience check writing system that allows agencies to make purchases and payments using checks in lieu of cash. The bank will:

• Provide a supply of checks to the designated convenience check account holder;
• Process and pay the checks as they are presented through the bank check clearing system for payment within established single purchase limits established by the A/OPC for each individual; and
• Provide a listing of the checks cleared on the monthly cardholder statement. Hard copies of checks are available upon request.

As an A/OPC, you are responsible for the implementation of the appropriate internal controls and oversight of convenience check activity, including ensuring that all checks issued are for official Government business only and are stored in a secured location. You must verify that each check issued was both necessary and in compliance with the agency's convenience check policy. The convenience checks shall be guaranteed by the Contractor against theft or loss. The Contractor shall be notified of lost or stolen checks. The liability of the centrally billed account participant for lost or stolen checks shall not exceed the lesser of $50 or the amount of money, property, labor, or services obtained before notification to the Contractor.

The cardholder should record in his/her files the date, check number, payee and amount of each check.