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

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

Challenges of the Purchasing Process

How the Corporate Purchasing Card Works

Why is the Streamlining of Small Purchases Significant? 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

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

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

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.

What are Procurement Cards? They look and operate similar to credit cards They do not carry a revolving line of credit 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

Superior Control and Flexibility 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

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

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

Number of Cards

Volume

Billing Cycle Requirements School District may choose a billing cycle cut-off of the 5th or the 20th 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

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

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

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

Online Capabilities (7-24) 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 View/Manage Program Information Access to Web reporting tools

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

Benefits of a Purchasing Card Program for Management 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

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

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

Angie Peterman Director of Admin 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

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