1. Angie Peterman – Oregon ASBO Executive Director PRO-Cards: The next generation of procurement strategies using 21 st Century technology

2. The Traditional PO Process Can Be Painful… Paper Intensive / Mountains of Paper Paper Intensive / Mountains of Paper Multiple Departments Involved Multiple Departments Involved Same Process Regardless of Transaction Value Same Process Regardless of Transaction Value High Average per transaction cost to School District High Average per transaction cost to School District High average per transactions cost to the vendor High average per transactions cost to the vendor Not Cost-Effective for Small Purchases Not Cost-Effective for Small Purchases

3. Challenges of the Purchasing Process

4. How the Corporate Purchasing Card Works

5. Why is the Streamlining of Small Purchases Significant? 1. The majority of transactions in most organizations are for relatively small amounts:  District 203 – 58% of AP checks are for less than $500  District 204 – 58% of AP checks are for less than $500  Institute Of Management & Administration article – 60% of case study purchases less than $1, 000

6. What are the Experts Saying? “ The average cost of processing a purchase order manually is between $75- $200. Automating procurement reduces that cost to between $10-$40…. The Return-On-Investment (ROI) for eProcurement is amazing.” -Deloitte Consulting “ The average cost of processing a purchase order manually is between $75- $200. Automating procurement reduces that cost to between $10-$40…. The Return-On-Investment (ROI) for eProcurement is amazing.” -Deloitte Consulting

7. Real Example of Reducing Paper Work Fulton County Schools, Georgia Fulton County Schools, Georgia –70,000 Students –Two cards per building –Reduced PO’s from 60,000 to 30,000

8. Key to Success: Get PRO-cards into the hands of those who are currently making small purchases/generating PO’s of less than $1,000.

9. What are Procurement Cards? They look and operate similar to credit cards They look and operate similar to credit cards They do not carry a revolving line of credit They do not carry a revolving line of credit Usage and authorization parameters can be reviewed and managed via the internet by district administration Usage and authorization parameters can be reviewed and managed via the internet by district administration They control what can be purchased, where and limit amount per transaction They control what can be purchased, where and limit amount per transaction

10. Superior Control and Flexibility Cardmember Spending limits can be established for each card Cardmember Spending limits can be established for each card –Transaction limits per charge –Monthly limits –Preferred Supplier Restriction –Cardmembers can only charge at school district’s preferred suppliers

11. Advantages of an Association sponsored program One contract vs. many One contract vs. many Reduced legal expense Reduced legal expense Ability of association to ensure Ability of association to ensure –Adequate controls –Proper audit trail Customized Card Design Customized Card Design –Displaying 1.User’s name 2.School District name

12. Advantages of an Association sponsored program (Cont.) Implementation and inservicing Implementation and inservicing Rebates Rebates Creates a user group/support network Creates a user group/support network Gives the program contract negotiation clout Gives the program contract negotiation clout Creates a database on a statewide basis of what schools are purchasing and the quantity Creates a database on a statewide basis of what schools are purchasing and the quantity

13. Number of Cards

14. Volume

15. Billing Cycle Requirements School District may choose a billing cycle cut-off of the 5 th or the 20 th School District may choose a billing cycle cut-off of the 5 th or the 20 th Payment is due at Harris Bank within 21 days of billing cycle cut-off Payment is due at Harris Bank within 21 days of billing cycle cut-off –Penalty for late payment (Prime + 7%) on all transactions in the billing cycle Penalties can be avoided with pre-planning and monitoring on-line usage reports Penalties can be avoided with pre-planning and monitoring on-line usage reports

16. Billing and Payment Monthly Billing Statements Monthly Billing Statements –Consolidated Billing Statement (Available online) –Cardmember Report (available online) Payment Methods Payment Methods –Electronic Funds Transfer –Automated Clearing House –Check

17. Why was MasterCard selected? Global acceptance at over 35 million locations Global acceptance at over 35 million locations –“Few if any other cards are more widely accepted.” Retailers benefit from low transaction charge. Retailers benefit from low transaction charge. One of the lowest rates in the industry One of the lowest rates in the industry

18. Why was MasterCard selected? (cont.) Superior vision around technology and e- commerce Superior vision around technology and e- commerce MasterCoverage fraud protection insurance MasterCoverage fraud protection insurance Dedicated Merchant Group (Moneris) to sign up suppliers Dedicated Merchant Group (Moneris) to sign up suppliers Customized card design displaying the name of card holder, school district, tax exempt number Customized card design displaying the name of card holder, school district, tax exempt number Individualized Training Individualized Training

19. Online Capabilities (7-24) Online Program Management Online Program Management –Submit, approve, and cancel Card accounts –Instant Account Activation –Adjust spending limits/manage Cardmember profiles –View Cardmember charges –Change accounting information Online Information Services Online Information Services –View/Manage Program Information –Access to Web reporting tools

20. Vendor Benefits Reduces vendor transaction costs Reduces vendor transaction costs Vendor paid by Harris within 48 hours of shipment/pick-up Vendor paid by Harris within 48 hours of shipment/pick-up Reduces the issues of partially filled orders Reduces the issues of partially filled orders

21. Benefits of a Purchasing Card Program for Management Easier on Accounts Payable Easier on Accounts Payable –Submit one monthly payment vs. multiple payments to multiple vendors –Reduction in paperwork –Fraud prevention and protection through the Bank and Mastercard –Detailed reporting available 24 x 7 –Easy online administration and dedicated customer support –Control on spending limits and accepted vendors

22. Steps Necessary to Participate in the Procurement Card Program 1. Request information packet from Oregon ASBO 2. Submit resolution to local school board for purchasing card participation/last 3 year’s audits/other packet information 3. Identify local Purchasing Card administrators 4. Complete application packet – send to Oregon ASBO 5. Schedule and complete training

23. Steps Necessary to Participate in the Procurement Card Program (Cont.) 6. Identify Cardholders 7. Designate individual parameters 8. Establish internal control process for statement reconciliation 9. Have individual users sign usage agreement 10. Distribute cards 11. Monitor the program

24. Angie Peterman Director of Admin. Support Services Oregon School Boards Association P.O. Box 1068 Salem, OR 97308-1068 503.588.2800 (Tel) 503.588.2813 (Fax) apeterman@osba.org

25. PACKETS