Angie%20Peterman%20

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PRO-Cards The next generation of procurement
strategies using 21st Century technology

• Angie Peterman Oregon ASBO
• Executive Director

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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

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Challenges of the Purchasing Process
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How the Corporate Purchasing Card Works
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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

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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

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Real Example of Reducing Paper Work

• Fulton County Schools, Georgia
• 70,000 Students
• Two cards per building
• Reduced POs from 60,000 to 30,000

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Key to Success
Get PRO-cards into the hands of those who are
currently making small purchases/generating POs
of less than 1,000.
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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

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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 districts
  preferred suppliers

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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
• Users name
• School District name

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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

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Number of Cards
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Volume
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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

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Billing and Payment

• Monthly Billing Statements
• Consolidated Billing Statement (Available online)
• Cardmember Report (available online)

• Payment Methods
• Electronic Funds Transfer
• Automated Clearing House
• Check

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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

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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

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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

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Vendor Benefits

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

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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

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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 years
   audits/other packet information
3. Identify local Purchasing Card administrators
4. Complete application packet send to Oregon ASBO
5. Schedule and complete training

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Steps Necessary to Participate in the Procurement
Card Program (Cont.)

1. Identify Cardholders
2. Designate individual parameters
3. Establish internal control process for statement
   reconciliation
4. Have individual users sign usage agreement
5. Distribute cards
6. Monitor the program

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Angie PetermanDirector of Admin. Support
Services Oregon School Boards AssociationP.O.
Box 1068Salem, OR 97308-1068503.588.2800
(Tel)503.588.2813 (Fax)apeterman_at_osba.org
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PACKETS