President's View...Stephanie Eagen - Purchase Card Pointers

Many school districts have implemented purchasing card programs in recent years. Over 125 districts are using the MSBO program. One of the nice features of this program is the assistance with procedures; policies and forms are available from the schools that have spent significant time researching these issues and are willing to share. In Port Huron, the purchasing card process was recently introduced through a board resolution to initiate the program. I would like to share several issues/opportunities which arose that may be helpful to others.
Internal Controls
Much discussion surrounded the internal controls related to purchasing cards at our school board meeting. There was some concern that the proposed initial steps would not be monitored on a continuous basis. This is interesting given that school districts are required to document and maintain an internal control system to protect school district assets. There are many restrictions that may be placed on individual purchasing cards to enforce your district’s internal controls. No matter how busy each business office may be, controls must be maintained on an ongoing basis. Audit requirements are not becoming simpler, but rather are more complex in the internal control monitoring and documenting area. This provides some strength to the purchasing card process. We can’t do “C” work in the school finance area and be successful, even if there is a lack of time or staff. A properly implemented purchase card program will provide some assurance to board members that the controls in place will be maintained by district staff and tested at some level by the external auditors.
Local Businesses
Another opportunity that will arise following the implementation of purchasing cards relates to increasing your support of local businesses. Previously, the school district only conducted business with those entities sophisticated enough to accept purchases orders and invoice the school district. Now with the use of a purchasing card, local businesses that accept MasterCard are now available as vendors. In this difficult economy, many of our smaller local businesses are happy to have this opportunity. This program will allow your staff more flexibility to support your local economies.
Tracking of Purchases
The ability to provide detailed information related to purchases in an electronic format is another great feature of the purchasing card program. Under the current system, it is difficult to monitor which vendor purchases are initiated by individual employees. This could take a great deal of time to track. With purchasing cards, electronic reports will be available to track spending by cardholder. This will provide a great deal of information to supervisors and central office staff.
Individual purchasing cards may be managed to create spending limits to allow for limited spending and careful budgeting. Rather than reducing budgetary control, it can actually be enhanced by using this tool. If you have been considering implementing this program and have not done so, these features as well as others, make it quite beneficial.