The GSA SmartPay program generates performance-based refunds for agencies/organizations.
Types of refunds include:
- Sales Refunds: based on the dollar or spend volume during a specified time period
- Corrective Refunds: payments made to the agency/organization to correct improper or erroneous payments on an invoice
Why are refunds allowable under the GSA SmartPay Master Contracts?
Unless an agency has specific statutory authority to handle funds received, 31 U.S.C. § 3302 states that incoming funds are to be deposited into the Treasury general fund. The exception to this rule is when funds qualify as "refunds" which are defined as "repayments for excess payments." Or, refunds can be defined as "amounts collected from outside sources for payments made in error, overpayments or adjustments for previous amounts disbursed." Under either definition, these "refunds" must go back to the appropriation or fund account(s) from which the excess payment were made.
Sources: Rebates from Travel Management Center Contractors, B-217913, 65 Comp. Gen. 600; May 30, 1986; Accounting for Rebates from Travel Management Center Contractors, B-217913.3, 73 Comp. Gen. 210, June 24, 1994.
GSA originally looked into the use of refunds as part of its TMC contracts and the Comptroller General found that if the TMC contractor agreed to discount its services to the Government, GAO saw no reason why the agency should not be authorized to deposit this saving to the credit of the appropriation against which the initial cost of the employee travel was charged since these receipts are actually a return of a portion of a prior agency payment and may be deposited to the credit of the appropriation against which the payment was initially charged rather than to a general fund receipt account. If the appropriation initially charged has not expired, the refund is available to support new obligations. If the appropriation account initially charged has expired, but has not yet closed, the refund is deposited to the credit of the expired account where it is available for recording or adjusting obligations properly incurred before the appropriation expired.
Sources: 71 Comp. Gen. 502 (1992); B-217913.2, Feb. 19, 1993; GAO, Policy and Procedures Manual for Guidance of Federal Agencies, title 7, §§ 4.3, 5.4 ; 31 U.S.C. § 1552(b).
This same analysis and reasoning was applied to the GSA SmartPay program with respect to refunds. Refunds under the GSA SmartPay program are discounts offered by the banks, which may be deposited to the credit of the appropriation against which the initial cost was charged. If that appropriation has expired, but not yet closed, the refund may be credited to the expired account where available. If the appropriation has expired, and the expired account has been closed, the refund would be properly credited to the appropriate Treasury general fund. The exception permitting the deposit of refunds to the appropriation initially charged is permissive in nature. If an agency declines the refund, it should be deposited to the Treasury general fund.