PROCURE-TO-PAY (P2P) PROCESS ENHANCEMENTS STATUS REPORT THROUGH APRIL 2007

2 Procure-to-Pay Process Enhancements FY06 Results Payment within supplier terms increased 4% FY06 over FY05 PO Invoices on hold greater than 30 days were reduced by 73% –8 Schools/Centers reached zero holds > 30 days –6 Schools/Centers reduced holds > 30 days by 80% or better PO Invoices Not Entered In Within 30 Days were reduced by 15% –10 Schools/Centers attained 50% reduction or greater –5 Schools/Centers attained 40% reduction PO Approval After Supplier Invoice Date were reduced by 16% –8 Schools/Centers attained 50% reduction or greater –3 Schools/Centers attained 40% reduction Invoice Rejections were reduced by 42%

3 Procure-to-Pay Process Enhancements Key Performance Metrics PO Supplier Payment Performance –This metric is the key indicator for payment results which are driven by eliminating the following process exceptions PO Invoices on Hold Greater Than 15 Days –Invoice holds are not being cleared in a timely manner resulting in late payments –FY07 Goal is zero greater than 30 days by 12/1/06 and zero greater than 15 days by 6/30/07 –Cycle time for PO Managers to clear holds should be 7 days or less PO Invoices Not Entered In Within 30 Days –Invoices are being received in the departments and not forwarded to AP in a timely manner to ensure payment within terms –Procurement policy states all PO invoices should be sent directly to AP by the supplier PO Approval After Supplier Invoice Date –PO’s are not properly approved before the purchase –PO’s are being created and approved after the supplier invoice is received –Potential exists for double payment or shipment and purchase commitments are not properly stated C Form Processing –Expenditures are not subject to approval before the purchase –C Forms are a totally manual process and represent 25 to 30 % of AP transactions processed –Wider use of PO’s would better leverage University spend Invoice Rejections –Invoices are rejected and returned to suppliers when they do not have the proper PO number or vendor information or if the PO has been finally closed –This results in extensive manual re-work for both Schools/Centers and AP

4 Procure-to-Pay Process Enhancements PO Supplier Payment Performance PO Supplier Payment Performance : –FY 2007 Goal - Increase invoices paid within terms to 75% or higher –FY 2006 Baseline 59% –For March 2007 PO invoices paid within supplier terms were 74%, an 11% increase from February –YTD payment performance through March 2007 was 60% a 1% increase over the FY06 baseline % Payment Within Terms

5 Procure-to-Pay Process Enhancements PO Invoices on Hold PO Invoices on hold greater than 30 days : –FY 2007 Goal – Eliminate holds > 30 days and move holds processing to within 7 days –FY 2006 Baseline is 246 holds as of June 30, 2006 –YTD holds > 30 days decreased to 224, a 9% decrease over the baseline Invoices on Hold > 30 Days

6 Procure-to-Pay Process Enhancements PO Invoices on Hold PO Invoices on hold greater than 30 days : –FY 2007 Goal – Eliminate holds > 15 days by June 30, 2007 and move holds processing to within 7 days –FY 2006 Baseline is 503 holds as of November 30, 2006 –YTD holds > 15 days decreased to 392, a 22% decrease over the baseline Invoices on Hold > 15 Days NEW MEASUREMENT DECEMBER 1, 2006

7 Procure-to-Pay Process Enhancements PO Invoices Not Entered Within 30 Days PO Invoices not entered into BEN within 30 days : –FY 2007 Goal – 50% reduction in this exception. Long-term goal is zero exceptions. –FY 2006 Baseline is 3,315 average monthly exceptions for FY 2006 –April 2007 invoices not entered in 30 days decreased to 2,073, a 38% decrease over the baseline Invoices Not Entered Within 30 Days

8 Procure-to-Pay Process Enhancements PO Approval After Supplier Invoice Date PO approval after the supplier invoice date : –FY 2007 Goal – 50% reduction in this exception. Long-term goal is zero exceptions. –FY 2006 Baseline is 2,500 average monthly exceptions for FY 2006 –April 2007 PO approval after the supplier invoice date decreased to 1,253, a 50% reduction over the baseline PO Approval After Supplier Invoice Date

9 Procure-to-Pay Process Enhancements C Form Processing C Form Processing : –FY 2007 Goal – 20% reduction in C forms processed. Long-term goal is zero exceptions. –FY 2006 Baseline is 6,840 average monthly C forms processed for FY 2006 –April 2007 C form processing was 6,288, a 8% decrease over the baseline C Form Processing

10 Procure-to-Pay Process Enhancements Invoice Rejections Invoice rejections : –FY 2007 Goal – Reduce invoices rejected by 50% –FY 2006 Baseline is 555 invoice rejections from June 2006 –February 2007 invoice rejections decreased to 212, a 62% decrease over the baseline Invoice Rejections