Putting it on the card

A few years ago, Polk County, Fla., introduced the use of purchasing cards to improve the efficiency of its accounts payable system. Today, all of its agencies use the cards for small purchases (under $2,500), a change that has increased accountability among employees and saved money for the county.

Polk County’s Purchasing Director Buddy Storey decided to pursue a purchasing card program after an auditor reported the county’s direct purchase order system had flaws that could lead to waste and fraud. The county had kept a log of purchase order numbers for all transactions, however, the clerk who assigned the numbers to employees had no further control over which employees eventually used the number. “Not only that, but every purchase was costing us an average of $35 to $150 per transaction to process,” Storey says. “With thousands of annual transactions, the system was costing the county millions of dollars.”

The county could align its direct purchase order system with appropriate controls, which would have been more cumbersome and expensive, or introduce a purchasing card system. The state already had a purchasing card program with Charlotte, N.C.-based Bank of America, which issued cards from San Francisco-based Visa USA, so Polk County’s Board of County Commissioners joined that contract at zero cost in June 2001. Employees were trained, and approximately 100 cards were issued in six divisions as a pilot program. Within three months, employees in the remaining 29 divisions of the Supervisor of Elections were issued cards, and within two years, all remaining Polk County agencies were trained to use the cards.

The purchasing director managing the program controls each card’s usage parameters — including spending limits, merchant acceptance and time of use — and can change them within 10 minutes as needed so employees in special circumstances can make necessary purchases. The director also can view all transactions through a real-time electronic statement system that tracks each employee’s expenditures as they are made. Employees submit all receipts to the director for verification and tracking at the end of the month when purchasing card balances are paid in full.

Polk County earns cash rebates based on its total volume of business for the year. Because the card program saves time and money on each transaction, the county has increased its small purchase cap to $2,500 from $500. Purchase card transaction volume has grown rapidly from $800,000 in 2001 to an estimated $15 million in 2006. Storey estimates that if the county still were using the old system, he would have to hire at least four more employees to handle the county’s current transaction volume of about 48,000 transactions per year.

Project:
Purchasing card program

Jurisdiction:
Polk County, Fla.

Agency:
Board of County Commissioners, Supervisor of Elections, Clerk of the Court

Vendors:
Charlotte, N.C.-based Bank of America

Date began:
June 2001

Cost:
Zero