Angie Peterman Oregon ASBO

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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

• Request information packet from Oregon ASBO
• Submit resolution to local school board for
  purchasing card participation/last 3 years
  audits/other packet information
• Identify local Purchasing Card administrators
• Complete application packet send to Oregon ASBO
• Schedule and complete training

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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

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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