P-Cards Expedite Emergency Response and Daily Operations
P-Cards Expedite Emergency Response and Daily Operations
As a procurement tool, the purchasing card has introduced a wide range of efficiencies to government entities on all levels. First used for small-dollar transactions, the card now facilitates purchase activity, reduces the cost of doing business, preserves purchasing controls, maximizes audit trails, and captures invaluable data at the point of sale.
Government entities continue to improve the procurement process by identifying innovative ways to use the cards, placing effective controls that reduce misuse, and increasing cost efficiencies.
Hillsborough County, FL, has had a purchasing card program in place since 1999. Today, the PCard Program provides purchasing cards to more than 900 employees in all departments under the county’s jurisdiction, as well as a number of outside agencies such as the Environmental Protection and Public Transportation Commissions.
“Over the years we have implemented procedures to enhance the program and add value for the county employees,” says Tony Stevenson, Manager of Administration, Information Systems and Procurement Support for Hillsborough County.
One example of the county’s successful purchasing card initiatives is the Emergency Card Program.
“The emergency cards are especially valuable in the event of a natural dis-aster,” says Stevenson. “Because we are situated along Florida’s gulf coast, the county keeps a watchful eye for tropical storms and hurricanes,”
“In the event of a hurricane, many cardholders have the purchasing power to get out there and acquire tools, equipment, and materials necessary to recover the county in a disaster situation,” says Stevenson.
When an emergency is declared that affects Hillsborough County, the county administrator decides which departments’ purchasing cards need to be upgraded and notifies the purchasing department. Bank of America, the county’s financial institution, will then be contacted. The bank will change those individuals’ accounts to emergency status with increased spending limits (in many cases, up to $100,000).
The county uses 12 merchant category code groups (MCCGs) to encode cardholder limitations. As in most government purchasing card programs, a number of commodity categories and cash advances are blocked.
“Certain codes are closed during normal business, but in a declared emergency, we can open up the cards to everything except cash,” says Linda Wheat, Purchasing Card Supervisor for Hillsborough County. “In an emergency, one of the only places selling ice may be a convenience store, and if that’s the closest available store that has that commodity, we give cardholders the power to get the job done.”
The county provides fuel-only cards to its fleet department, office-supply cards to most employees, and executive-level cards that include travel provisions. Fire rescue cards allow Hillsborough County’s firefighters to travel throughout the State of Florida or nationwide and pay for fueling of fire rescue vehicles, lodging, and meals in response to an emergency situation.
Cardholders file monthly transaction logs to their department coordinators who review the information and forward the logs to the accounting department. The accounting department pulls a monthly report that details which cards had no activity. Therefore, no log is required for cardholders with no transactions.
“If the accounting department comes across any questionable transactions, the cardholder is brought to our attention and we research the purchase,” says Wheat.
According to Wheat, a future goal is to add small construction projects to the purchasing card program.
“It’s a matter of making adjustments to the accounting system to show that a transaction was made on a PCard,” says Wheat. “That amount will then be deducted from the blanket purchase order.”
“If we are paying for material or labor with the purchasing card, we need to feed those transactions from Bank of America into our accounting system to reduce the encumbered amount,” says Stevenson. “We are working through the procedures of getting those transactions from the Electronic Accounting General Ledger System (EAGLS) into the financial system, so at any given point our financial department or project managers will know how much money is left.”
The county also looks to add all commodity and service contracts to the PCard Program using “ghost” accounts.
According to Jeri Winkleblack, Account Manager of Corporate and Commercial Card Services, Bank of America, “These ghost accounts will provide vendors with an account number, but there will be no credit card actually issued.”
The accounts will allow a contract vendor to automatically group all purchases for the county on one account—each time a purchase is made. The ghost accounts will eliminate many steps, including purchase orders, requisitions, and issuance of checks.
“It’s almost like a direct bill, but it goes one step further in that the transaction is already paid,” says Winkle-black. “Ghost accounts are a different method of using a purchasing card, and many agencies are using credit-card accounts this way.”
For example, the county might choose to set up an account to purchase sod that is delivered to its parks. Although there is actually no piece of plastic, everything the sod vendor delivers will be automatically billed to a particular credit-card account.
The county uses a database (outside of the bank’s system) to monitor card-holder activity, disputed purchases, violations, and specific merchant category code (MCC) charges. “We are able to monitor this data by queries that allow us to pull the information in numerous formats,” says Wheat.
The database houses all cardholder information, including account numbers, open/close dates, and PCard activity (downloaded from EAGLS).
The support of Hillsborough County’s Board of County Commissioners, County Administrator Daniel A. Kleman, along with Director of Purchasing and Administrator of the PCard Program Lula F. Banks, is instrumental in the program’s success.
By ensuring management endorsement, determining the number of control layers, developing a user’s guide that includes county purchasing policies, and auditing cardholder transactions, the county has put in place the essential elements for success.
“The PCard program is one of the fastest growing programs that we have in the county,” says Stevenson. “The program is doing exceptionally well for county employees and other government agencies.”
2003 Purchasing Card Benchmark Survey Results GOVERNMENT EXECUTIVE SUMMARY
Most governmental and not-for-profit organizations have undergone significant budget and spending reductions over the last two years. Notwithstanding, throughout this time period, overall purchasing card spending has grown, though at different rates depending on the type of governmental or not-for-profit entity.