One of the most egregious was one federal employee that was working remotely that had started his own business, full-time business, and during the work hours, his mother was responding to his emails.
Well, on to a very different topic from space. Thank you so much for joining us everyone. Senator Ernst, in particular, you are now the chair of the Doge Caucus in the Senate, which is super exciting. And so I was hoping to focus today's conversation on just government efficiency, but in particular to start off on just like financial flows. How does the Fed send out payments? How are those tracked? What are those done? I know one of the first bills that you put out with the caucus was codifying some of the work that the early Doge team put together. I'd love to hear about your work with the Doge team, that early bill, and we can take it from there.
Well, thank you Deian and it is great to be here with you and thanks to Hill and Valley Forum for doing this panel. I think we'll have a lot of fun with it. To answer your question on how are those payments made coming out of Treasury, that's a really good question. Nobody really knows. So what has happened in previous administrations and for many, many years, so we can't put one particular president on a pedestal here, but the way the payments are made through Treasury, and approximately 95% of federal payments go through Treasury, is they're just submitted. There has been no tracking requirements, no auditory numbers that are attached to any of those payments, no explanations attached to those payments. So if you are double paying, it's not caught, it's not really auditable. So we are changing that. One of the proposals that we have coming out of Doge in response to that is to require those numbers that go to specific accounts for any of the federal payments to require that they are putting a description of the payment in there. And Elon has been really great about this. He's like, I don't care, just type something in. It can be a couple of words. Just type something in so we know how to track it. It's so simple and yet we haven't been pushing for that in previous years, but we've got a lot going on in Doge and I'm really excited to talk about it today.
So, thank you. No, of course. Thank you for joining us. Keith, you originally started your whole tech career at PayPal, which was one of the early internet payment flow companies. I guess when you hear about Senator Ernst talk about some of the challenges internally at the government, how do you think the government should be thinking about adopting some of these financial services technology companies and their workflow?
Well, interestingly enough, 25 years ago, when Elon was CEO, we were losing way too much money in fraud and the company was almost bankrupt because we weren't actually doing some of these things. So, I'm glad that Elon learned from that experience and was applying it to the Treasury at like a thousandx scale. So, these are fundamental things. None of our companies, none of the companies we're involved in, including Ramp, would ever survive an audit if we did anything even approximating what the Treasury has been getting away with for 20 years. So, it's insane that we don't have basic accounting principles being applied to the federal government.
Yeah. And it seems like it's not only true for Treasury and Fed, but also DoD hasn't passed a government audit for almost 20 years as well. Jody, I know you also had a request out to the Government Accountability Office. A part of the current government's plan for spend is using the GSA smart card system and Doge found that there were three plus cards per employee. Nobody could figure out the maxes or mins, what the payment policies were, who the approver was. And so talk me through a bit about what you guys found there and why your request was out.
Absolutely. Okay. So, a lot of folks that work for the federal government will have a GSA credit card. That's to cover official costs for official business. And this is something Eric and I were just talking about this backstage in the green room. There are approximately 4.6 million GSA cards and accounts. We have half that number when you look at the number of federal employees. So, what the heck? I know that I only have one card. That could mean that somebody out there has three cards, maybe more. Who knows? But fact of the matter is, we're not tracking those cards. We're not tracking those accounts. And again, they can't be audited. So, just last year, and I'm going to provide the stats I was talking about backstage. Just last year at DoD, our troops, civilians, they all have GSA credit cards and it's for official travel expenses, etc. Well, what we found is that there are about 8,000 charges just last year alone that were made at what they would consider risky charge points of sale where things like casinos. Okay, I don't know of much official business that's being done at a casino. And an additional 3,000 charges were done on federal holidays or days like St. Patrick's Day, New Year's Eve, UFC 300. I think a lot of that, 80 bucks on ESPN Plus and you get UFC 300. So again, a lot of charges that we need to investigate and uncover the fraud associated with it. But then we also need to find ways of tackling these challenges, deactivating those accounts, getting rid of those extra cards. And it could be that somebody on the stage maybe has a solution to that.
Well, speaking of that solution, Eric, you're the CEO of Ramp. You've become this sort of preeminent AI-enabled corporate card financial management platform. I want to get your take on like, okay, you guys have companies that are customers of yours that have lots of employees. What types of technologies do you guys do to make sure that people aren't spending on MGM casino and UFC fights and are instead using the cards appropriately?
Well, first, thanks so much for having me here. And look, I think there's just been a tectonic shift in terms of how payments are done by the private sector over the past 10 years. I would almost compare this to if it would be ludicrous if the Air Force was flying around propeller planes when there are jets out there. In the past, what makes these cards and charges so difficult to audit is you have one, your expense policy is a long policy document that exists department by department but it doesn't drive how the credit cards actually behave, what you can and cannot purchase. We rely on people to show good judgment to not go to the casino for government purchases, to actually use the card for the intended purchase. Then you have other systems for receipts, other systems for accounting and auditing. And so when you start to look back, it's no wonder that you have outcomes like the DoD hasn't passed seven audits in a row. Part of what's really changed over the past decade is now credit cards are programmable. You can card by card have the policy drive what particular merchants are allowed or are not allowed. So you can do things safely like issue for a critical medical supplier a $10 million card that can be just for authorized medical purchases, but if it's used at a different vendor, it's denied. You can also do things like say if we have a purchase order for this amount, if this vendor, even a great vendor tries to charge the government even a dollar more than what was agreed upon, we can have that negotiation. And so the difference is these aren't just different rules that don't connect. It actually is driving the credit card payments. And when you put this together, you see outcomes like for great companies on stage earlier like Anduril to 40,000 organizations, from for-profit to nonprofit like the Boys and Girls Clubs of America that are able to cut their costs every year by 5 to 15%. Which is dramatic on the scale of the government which moves more than $40 billion a year per card. You're looking at billions of dollars a year in savings just if we can replicate the outcome from adopting better technology that private companies have.
So you're saying that if a young soldier takes that credit card to the pink pony club, they won't be able to get that'll be denied.
That is programmable. That's right.
Great. Great. Thank you. This whole day of panels has been touching on some topics where the idea of the government collaborating with commercial technologies has been talked about for over a decade in all things aerospace and defense, what Palantir or Anduril or SpaceX are all working on. But it feels like it's sort of a new topic for the government to be thinking about more basic technologies and the way they should be looking to commercial industry. And so I guess I'd love to hear from you. How do you think that policy makers and legislators like yourself could be encouraging various departments and agencies to not just look to commercial technology for aerospace and defense technologies, but also for financial flows, auditing, efficiency? How do you think about implementing that?
Now, I think that's really important because and I've had the great opportunity to focus a lot on DoD. I love that and I'm glad that we're wrapping this technology into DoD and our combatant commands. But if you take that same technology and use it for everyday services that affect Americans all across the country, around the world, we can really make a difference. And just for example, taking the technology and enabling Treasury to cross reference with Social Security and a death database to make sure that we aren't paying dead people Social Security. So we're working on those changes in Congress. We need to enable these simple fixes to use technology and AI for good purposes. So we all think of Doge as slashing the waste in federal government. But we can also use it, and we forget Department of Government Efficiency, AI can make us so much more efficient across every space and every agency within our federal government.
I mean Keith, you're on the board of 17 different companies or something like that, known as a world-class COO. How have you seen just with all these net new technologies, AI, payment flows, even companies of yours that are customers of Ramp adopting some of these technologies to be more efficient?
Well, at Ramp specifically, we've seen an increase in productivity by 46% already. And the slope is pretty steep. So, it's going to increase. So, imagine taking any set of employees and making them 46% better, faster and increasing every 70 days or so. So, the government needs to get on that train. Obviously, we have limited resources that we should send to the government. We're spending a lot in debt, going to fix that. But also, the American people deserve to keep their money. And so, if you don't use technology, we're artificially taxing people, taking money from families that better belongs with them than in this city. And if we don't use technology, we're just going to continue to take more money than we need to from American families so that they can't raise their kids. And so, all of this stuff is solved in the commercial world. As Eric pointed out, 5 to 15% on average we save a company money just by enforcing policies programmatically. So imagine take the government and take 5 to 15% of all credit card expenditures and just eliminate that. It's probably going to be higher in the government because the abuses sound more stark, right? And I feel like the government can learn from contractors that are closely working with the government that are adopting these technologies.
You know, Eric, one of your customers is Anduril, where the CEO spoke earlier here on stage. Can you talk a bit about how Anduril has adopted Ramp, what they've learned, what ways they've been able to identify by adopting Ramp?
