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Procurement Card Program
Introductory training sessions are held the beginning of each semester for individuals who wish to apply for a Citibank VISA Purchasing Card (P-Card) and have been approved by their supervisors as part of their official duties to do so.
Below is more information that may answer questions you have regarding the P-Card Program:
What is it? The New York State Purchasing Card program is a powerful and efficient tool to assist cardholders in making authorized purchases. It reduces costs and can expedite the procurement process.
Why do we need it? How much do you estimate it "costs" to buy something? If it is a workplace purchase, probably more than you think. Most people do not consider the administrative costs of procurement (e.g., processing of paperwork and personnel) in addition to the item's actual purchase price. Processing purchase orders and payment vouchers is an expensive and time-consuming process. Studies estimate that the cost of processing one purchase requisition averages $100 plus the actual cost of the item. Additionally, the time to complete the process averages 7-9 days. One way to reduce paperwork and allow for more timely purchases is to use the Card sponsored by the Office of General Services, (OGS). In other words, "Charge It" !
Where did it come from? New York State's 1995-96 Executive Budget recommendations introduced a purchasing practice expected to reduce paperwork and expedite payment to vendors by using a procurement card. Modeled after successful programs used in the Federal government and the states of California, Virginia and Oregon, American Express (AMEX) was awarded the contract in 1996 to provide NYS with procurement card services. In late 2003, Citibank VISA was awarded the contract through 2008.
The Citibank VISA Purchasing Card enables cardholders to make authorized purchases directly from a vendor without processing the purchase orders or purchase authorizations. Initially, the program allowed cardholders to make purchases of $500 or less with the Purchasing Cards. In October 1997, the maximum transaction limit for any agency participating cardholder was raised to equal the respective agencies' Quick Pay Threshold. For SUNY College at Brockport, transaction limits are a maximum of $2,500.
Purchasing Cards may not be suitable for all procurement transactions, but it makes sense for those low-dollar transactions that typically account for up to 70% of the purchase orders/requisitions processed.
How will it help? Use of the VISA Purchasing Card reduces purchasing costs by as much as 80%. Typical purchase order processing costs average $100. However, studies estimate that a typical procurement card transaction averages between $5-$20.
Administrative costs are also reduced by consolidating multiple supplier transactions processed by Purchasing and Accounts Payable into one monthly payment to Citibank VISA. This change in process allows our buyers to spend more time on value-added tasks and high-dollar transactions where negotiating and contract implementation can achieve a more significant dollar savings.
Proper use of the Purchasing Card can reduce the time between requesting, ordering and actual receipt of goods or services. One agency reported that transactions, including the receipt of merchandise and payment, have been completed in the same time that it used to take to get a purchase order issued after a requisition was completed.
Vendors reap the advantages of a procurement card transaction since payment is made quickly to them by the credit card company. This reduces their risk of late payment.
The purchasing card program is also helpful for those employees that work in the field and often require emergency or immediate purchases to complete the task as hand. Employees are given the flexibility to make the purchases they need, when they need them.
The P-Card offers an alternative procurement method to the requisitioning and reimbursement processes and allows authorized individuals to make purchases using the card up to $2500 per transaction.
Is it working? In 1999-2000, the Office of the State Comptroller (OSC) reported that they issued nearly two million checks that were less than $250 each. This did not include petty cash checks that were written by agencies. Although payments under $250 represented less than 3% of the total dollar amount of payments that were processed, they accounted for 67% of the total number of payments. Using the procurement card for these small-dollar purchases represents a substantial savings that is realized in time, processing costs and postage.
When can I get one? The Cards are not meant to circumvent any of the State's purchasing laws. In fact, all users of the Card need to be trained on the expectations for using the card. As the State is moving toward electronic transmission of information, it has become increasingly important for agencies to reassess their systems of internal control. In the past, paper transactions were supported by multiple approvals and authorizations. Now, however, we are encouraged to focus more on the ethics and integrity of our employees, their competence, and their knowledge of the State system.
For more information or to sign up for the next Introductory Purchasing Card Training Session, please contact Donna Napier, Procurement Card Administrator, at x5139.