Kansas Association of School Business Officials

P-Cards Offer Convenience and Tracking for Employee Purchases

13 Nov 2015 8:37 AM | Anonymous
KASBO has teamed up with Illinois ASBO and 14 partner ASBO states to offer the p-Card Program to Kansas school districts.  Procurement Cards, or p-Cards, have existed in the private and public sectors for many years.  They represent an evolution of the credit card brought about by applying new technology to an emerging e-commerce world that now includes schools. 

What makes a p-Card unique is that it was developed to maximize the benefits for schools and to potentially also help Associations.  Thanks to the partnership, this program offers an opportunity for better rebates to some school districts than they could achieve on their own.

Those who have worked in governmental agencies like school districts are very familiar with the process of using paper purchase orders and manually processing the procurement process from beginning to end.  We are more than familiar with the delays, bottlenecks. time wasted, duplication and costs associated with the old paper intensive process. Only recently has technology for schools become available that allows for the stream-lining of the process and a significant reduction in the paper flow. 

p-Cards can change the procurement culture, p-Cards will NOT eliminate all paper nor will they eliminate the need for and use of purchase orders.  p-Cards will reduce paper use, and remove the myth that the more paper we use the better the paper trail and internal controls.  p-Cards also help school districts identify all of the small transactions created each month and consolidates most of those into ONE payment.

While purchase orders were created to represent "current best practices" years ago and their processing has been streamlined over time, the fact remains that currently the manual process of purchase orders is painful, wasteful, and expensive to schools and to the companies and businesses doing business with us.

The research and articles published on the subject of what it costs from start to finish to obtain and pay for every item needed to operate a school district is clear.  The research is surprisingly consistent regardless of the source like: Deloitte Consulting, Accenture, US Bank, Fifth/Third Bank, American Express, CPS, Rockford SD and Elgin SD U-46.

The research shows that every purchase involving a purchase order carries a surcharge of $40-$200.  To illustrate, assume that in a school district a purchase order generates a cost of $100.  Then to buy a $200 piece of equipment, it REALLY costs us $300.  A $2500 piece of furniture REALLY costs $2600 and a $25 box of graph paper really costs $125.

What do you know about the checks that are used to pay your school districts monthly bills?  There are 3 basic questions you should ask yourself:

How many non-payroll checks are written each month?

What percentage of these checks are less than $100?

What percentage of these checks are less than $500?

What would have to change in the business operations office of your school district to significantly reduce the number of small transactions?  What savings in time and money could result?  What if a large majority of these small obligations could be consolidated into ONE monthly check - ONE MONTHLY CHECK!

True p-Cards should not be confused with a standard credit card or a business card issued by a bank.  A p-Card is not just another fancy name for a credit card.

True p-Cards, especially those customized to fit the legal requirements governing public sector spending, have these basic characteristics and capabilities:

  • They operate like a credit card. When a vendor asks whether the card is a credit or debit - the correct answer is credit.
  • They do not carry a revolving line of credit - the monthly balance must be paid in full each month.
  • Each card can be customized to limit the purchasing authority and spending levels. 
  • Our p-Card program has 24/7 access to daily card activity using internet access.
The program offered by Illinois ASBO is unique and provides the following added benefits and advantages:
  • Single contract covering all participating districts
  • Creates a user group/support network (currently in excess of 400 districts)
  • Negotiation clout
  • Due diligence costs eliminated
  • No annual fees on the cards
  • Free access to internet information
  • No minimum numbers of cards/or set up charges
  • No charge for Fraud Protection Insurance
  • No special hardware or software needed; just internet access
  • No charges or fees for monthly statement preparation/delivery
  • No fees or costs PERIOD*
  • Choice of 2 days in the month for cut off
  • Rebate
*There are three service charges a district may create.  The first is the LATE payment penalty.  The second is the interest on a CASH ADVANCE, and the third is a charge to use the card at an ATM.  At this time none of the school districts participate in these last two programs.  During the implementation process the administrator can remove these features from the program.  When a school district sets up its contract for p-Card services, it can elect to have a consolidated bill mailed to the district p-Card administrator monthly or simply go online, and download it - this is the preferred method of most administrators.  You can have each individual user download their own and reconcile it themselves if you prefer.  IT'S YOUR CHOICE.
Payment choices are pretty simple.  A school district can send ONE check or set-up an ACH payment system - this is preferred method and is the best way to assure payment is received ON TIME.

Illinois ASBO went through a very detailed and rigorous due diligence process using an RFP.  We received 12 proposals, analyzed each carefully and interviewed 3 finalists.  The technology platform and rebate plan that was selected was MasterCard through Harris Bank (Chicago) which is a subsidiary of the Canadian Bank - Bank of Montreal (BMO).

Every school district selects a p-Card administrator and an assistant who will have access to all school district p-Card activities on a 24/7 basis.  These people will be the ones responsible and capable of setting up and ordering cards, monitoring their usage, change spending parameters, shutting a card down - permanently or temporarily, and generating reports from the online management information system specific to the district.  These tools will help the school district become better buyers and decision makers, as well as, help with better budget control, cash flow and better investing plans.

School districts are not the only beneficiaries.  p-Cards are good business for vendors, as well.  It costs vendors money to process orders and payments.  p-Cards allow vendors to receive payment within 48 hours of processing the payment.  No longer will vendors have to wait until the next board meeting to get paid.

So how hard is it to become a participant?  It is pretty simple and use friendly.  Visit our Website at www.illinois-pcard.com to access the application documents.  Have your Board of Education adopt a resolution to participate.  Next, identify who the p-Card administrator and assistant will be.  Complete the other application documents and send them along with your last e years of financial audits to the Headquarters Office at Illinois p-Card, c/o Holly Wallace, 108 Carroll Avenue, DeKalb, IL 60115.

The packet information you send will be forwarded to Harris Bank for approval.  Upon approval, your p-Card administrator will be contacted by the Bank's implementation officer to set up a 30-45 minutes implementation.  This will be a training session so you can customize the set-up of each card and order cards.  Cards usually arrive in 7 to 10 days.

Now it's a matter of using the cards.  After the bank sees your card usage has started you will be called again to set up a second training session on how to access the website and reports.  If you have any questions about the Illinois ASBO p-Card program, please contact Holly Wallace by phone at 815.753.9083 or by email at hwallace@iasbo.org.  

Website at www.illinois-pcard.com

PO Box 8786, Topeka, KS 66608                                  


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