Salisbury Eyes Transition To Purchase Cards
SALISBURY -- With big savings expected, Salisbury is looking to transition from traditional paper-based purchase orders to an electronic format.
The City Council is considering replacing some paper checks with Purchase cards (P-cards), which are a kind of charge card for city employees. As of now, the plan is to use the cards only for orders of $999.99 or less. According to Salisbury Assistant Director of Internal Services-Procurement Division Catrice Parsons, roughly $9 million worth of city spending qualifies for the transition to P-cards.“We have a lot of vendors,” she said.
Instead of writing checks to vendors for city purchases, said Parsons, using P-cards could save thousands of dollars off the bat, with more savings possible as the program grows. By her estimate, the switch should save around $66,000, with an additional $107,000 returning to the city via rebates. As the number of vendors paid by P-card grows, the money coming back to Salisbury will increase.
“At this part of the process, we need to look at who we want to partner with,” said Parsons.
She suggested working with Bank of America (BoA) for the P-card project. Having worked with the organization before, Parsons was confident in its ability to meet the city’s needs.
“I have a wealth of knowledge to add to [the deal] if we do partner with them,” she told the council.
Parsons added that it made “the most sense to move forward” with BoA given the bank’s history and the fact that it’s already well established. Council President Terry Cohen didn’t question Parsons’ endorsement of BoA specifically, but did worry about what protections Salisbury has if issues arise within the bank.
“A lot of banks have been on the news recently for a lot of things,” said Cohen, hinting that many of those things were not positive.
In the event of BoA having troubles, however, Parsons pointed out that Salisbury would have a number of avenues to explore.
After hearing Parsons’ presentation, the council seemed fairly impressed with the idea of P-cards.
“Is there a downside?” asked Councilman Tim Spies.
“Fraud,” replied Parsons. “It’s always, always one of the issues.”
Without a paper trail, fraud becomes a bigger worry for the town. However, Parsons asserted that a few preventative measures would be enough to protect Salisbury. For one thing, the town will need to keep a close eye on who exactly P-cards are issued to; only trusted employees who deal with vendors on a regular basis need the cards.
A P-card administrator would also be chosen to monitor spending and will actually need to authorize money to be added to each card before a purchase. Using that system, said Parsons, makes it difficult to slip in fraudulent purchases since the exact amount of money needed for any transaction will be decided ahead of time and then reviewed afterwards.
“Our normal purchasing policies would still be in place,” said Assistant Director of Internal Services-Finance Gerri Moore.
One final question the council had was what will be done with any money that comes back to the city in the form of rebates. Several wondered if the money could be allocated back to individual departments with each department receiving whatever money they saved by using P-cards instead of checks.
“We would have to do that internally,” admitted Parsons, who explained that the rebates would typically just be placed in Salisbury’s general fund.
Any further shuffling of that money, she said, would be the city’s responsibility. All in all, switching from paper to digital was something the council supported.