More flexibility in use of BZ credit cards

BZ staff work in an international environment, and regularly encounter a variety of expenses in locations around the world. These range from entertainment expenses and hotel bookings to the payments needed for day-to-day operational management at missions.

Xiu Xiu Huang and Sybrand de Groes from FEZ and Carlos Martinez Montenegro from FSO explain how they tackled this task over the last year and what the resulting changes will mean for staff at the missions.

Cutting red tape at missions

One big improvement is that it’s now much clearer who is allowed to apply for a BZ credit card: namely, only staff members who, according to the competence table, are authorised to purchase products and services for operational management. Under the new rules, credit cards can now be used to make hotel and restaurant bookings and pay for receptions and events, and by managers for entertainment. This means staff no longer have to advance large sums from their personal accounts for these expenses.

Besides allowing credit card payments for more purposes, the rules for using them have also been updated. Staff now have clear and reliable guidelines for receiving and using credit cards and for financial administration of transactions. These guidelines are available on BZelf.

Simplified FSO procedure

The administrative side of using credit cards has also been simplified in various ways. For instance, thanks to a new cover page for processing credit card payments, missions no longer need to indicate approval of each individual invoice.

This makes reporting credit card transactions significantly less complex and contributes to more transparency in financial administration. Now FSO can process payments more accurately and the administrative burden on credit card users is lower.

Why BZ needed more flexible rules for credit cards

The existing frameworks stipulated that a BZ credit card could only be used for expenses that could not be paid by invoice. Even stricter rules applied to entertainment expenses, which could only be claimed for after they were incurred. As a result, staff frequently had to advance large sums and submit expense claims afterwards. A number of missions had informed the ministry that these rules were too inflexible and asked for more practical solutions that were more attuned to the realities of their work.

In response, a working group was set up to investigate how the rules for credit card use could be relaxed and clarified. It consisted of staff from the Financial and Economic Affairs Department (FEZ), the Human Resources Department (HDPO) and the Financial Service Organisation (FSO). The working group developed a broadly supported proposal that took account of both practical needs at the missions and Dutch legislation, which – as Sybrand notes – must be strictly adhered to.

Credit cards at BZ: rules vs. reality

FEZ took the lead, looking not only at years’ worth of practical data and existing contractual obligations, but also the experiences of missions around the world. The parameters were clear: the Central Government Financial Management Order states that a BZ credit card may only be used if payment is not possible by any other means. ‘Ultimately, we did find a little room for flexibility on this, as long as payments are strictly limited to business expenses,’ says Xiu Xiu. While that was a big relief, the path was still not yet completely clear of obstacles.

The balance between flexibility and manageability and the question of how to prevent misuse were discussed again and again. There were positives too of course, from the intensive cooperation between the various departments to the recommendations that could be directly applied to both day-to-day work at the missions and crisis situations. But concerns remained about the additional administrative burden and the risks associated with more flexible use of credit cards.