Corporate card: what it is and how it works in government – 01/26/2023 – Politics

The corporate card, in vogue with the discussion of expenditures made by former President Jair Bolsonaro (PL) in his four years in office, is an express payment method, aimed at speeding up public administration expenditures on urgent items.

The end of the secrecy of Bolsonaro’s card showed expenses of at least R$ 4.7 million on days when the former president was without a work schedule, enjoying vacations or holidays, watching football games or participating in motorcycles.

See below what it is, how it works and the main issues involving the corporate card.

What is the corporate card?

Created in 2001 by former president Fernando Henrique Cardoso (PSDB) and reformulated in 2005 by Luiz Inácio Lula da Silva (PT), the Federal Government Payment Card was intended to replace checks, used by previous governments to buy airline tickets or other items of interest to management.

With electronic payment, an attempt was made to provide more transparency and agility to government expenditures, which would now be entered directly into a database with the amount of expenditures, location, establishment and the author of the transaction, which could be either the president, as well as other members of the administration.

In 2008, the corporate card became mandatory for supplies of funds, such as urgent items that cannot be auctioned, and for expenditures requiring secrecy, such as those carried out by agents investigating irregularities.

How is the corporate card issued?

The federal government hires a financial system company that will administer the payment card under certain conditions —such as annuity exemption, administration fees, membership and maintenance.

Each government unit can adhere to the contract with the managing company, which will elect an expense originator —the manager responsible for managing the expenditure of each department— and will provide the card to the employees authorized to use it.

Who is entitled to the federal government payments card?

Only employees authorized by the body and verified by the expense originator can use the corporate card. The employee must present justifications for the need to use the payment method.

Some of the employees of the public administration, however, cannot have access to the card, according to the law that regulates the instrument, such as the expense accountant itself, public servants responsible for the material to be purchased through the card, those responsible for more than one supply of funds and those who are in the process of rendering accounts.

Does only the Presidency of the Republic have a corporate card?

Do not. Other bodies, such as the Vice-Presidency, ministries and other direct public administration bodies, may have access to the tool. There is, however, a decree ordering a special regime for the peculiarities of the head of the federal Executive.

This regime, however, has no regulation. An ordinance from March 2022 says that these peculiarities must be dealt with in accordance with current legislation, without mentioning limits or terms for more transparent spending of corporate card resources.

There is still the creation of special regimes for other positions and functions, such as indigenous health care by the Ministry of Health, agricultural attachés of the Ministry of Agriculture, departments of the Ministry of Foreign Affairs and intelligence and inspection activities of the CGU (Controladoria-Geral da Unity).

What fits into the list of corporate card purchases?

Purchases of repair, conservation, adaptation or improvement of movable and immovable property, graphic and photographic services, making of stamps, keys, travel and food expenses during the exercise of public service are permitted.

Some other expenses, such as events, publications, books and decorations, can only be used if an exceptional nature of the purchase is demonstrated, that is, a necessary and atypical transaction, in addition to a public interest and in case of need for secrecy in expenses.

Even so, there is no defined norm and no jurisprudence on what cannot be purchased by public servants with the corporate card, even though bodies such as the CGU guide by a strict interpretation of the decrees, asking for caution regarding its use.

Are there limits on spending on corporate cards?

Yes, all corporate cards have limits by type of expense established by the Minister of Finance, according to the set of decrees that regulate their use. There are R$ 15,000 in works and engineering services, and R$ 8,000 in expenses related to purchases and general services.

These values ​​are equivalent to 10% of the reference value for the modalities in the Bidding Law, which regulates the contracting and procurement process by the government.

There are also limits for individual expenses — they are BRL 800 for small expenses with purchases and general services, and BRL 1,500 for small expenses with works and engineering services.

Despite these general rules, another decree says that the expense accountant of each body with a corporate card will regulate the instrument’s usage limit and with which items holders of the payment method can spend.

How is proof of expenses and accountability done?

For all expenses incurred, it is necessary to present proof of expenses with the identification of the supplier establishment, the binding body of the corporate card user, in addition to the date and detailing of the item or service purchased, with quantities.

It is not necessary to present an invoice, and it is possible to prove the use of the card with common receipts or self-employment payment receipts, such as those used to reimburse taxi trips.

Can corporate card expenses be confidential?

Only expenses whose disclosure compromises the security of the President and Vice President of the Republic, their spouses and children, in addition to any other disclosure that could compromise the security of society and the State, such as Federal Police expenses, may be confidential.

The LAI (Access to Information Law) regulates the maximum period for releasing expenses on the corporate card — the Presidency’s expenses are protected until the end of the mandate, and the expenses of other bodies can be reserved between five and 50 years.

Even so, exceptions to the time of secrecy regulated in the legislation can be defined in the event of a specific event, such as the end of an investigation.