Agenda - 06-07-2011 - 5d - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 7, 2011 Action AgenSa j Item No. Q _SUBJECT: Approval for Implementation of Purchasin Card Pro ram DEPARTMENT: Financial Services PUBLIC HEARING: (Y/NJ No ATTACHMENT(S): Application "Piggy Back" State Contract Letter INFORMATION CONTACT: Clarence G. Grier - 245-2453 David Cannell - 245-2651 PURPOSE: To approve the County entering into an agreement with Bank of America to implement a Purchasing Card Program. BACKGROUND: Orange County raised the purchase order threshold from $100 to $500 at the beginning of Fiscal Year 2011. As illustrated below the number of purchase orders issued deceased by over thirty-nine percent between fiscal year 2010 and 2011. However the number of accounts payable checks issued and invoices processed has not gone down. FY 2011 FY 2010 % DECREASE PURCHASE ORDERS 2,691 4,439 39.37% # OF AP CHECKS 22,313 24,909 10.42% INVOICES PAID 51,790 55,152 6.10% Industry standards estimate the end-to-end cost of a paper-based transaction to be between $90 and $130 with the cost of issuing a check accounting for $20 of that estimate. A Purchasing Card Program will allow the County to greatly reduce the quantity of each of the transactions listed above. The program will allow the County to issue a single electronic payment at the end of the billing cycle rather than writing separate checks to multiple vendors. The Purchasing Card functions much like a credit card; however commodity restrictions and spending limits can be placed on cards on a card by card basis. Also each employee authorized to use a County Purchasing will be required to sign an agreement with strict penalties for unauthorized purchases (see attached). The Purchasing Agent will serve as Program Administrator and will monitor expenditures on a regular basis.